The CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany

Table of Contents

Summary of the Results ...... 4 Ancillary Revenue Defined ...... 12 About Individual Airline Listings ...... 13 A la Carte Services Sold through GDS ...... 13 Ancillary Revenue Data and Graphs ...... 15 Europe and Russia ...... 22 The Americas ...... 49 Asia and the South Pacific ...... 77 Middle East and Africa ...... 100 Currency Exchange Rates Used for the Worldwide Statistics ...... 108

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Issued September 2017 by IdeaWorksCompany.com LLC Shorewood, Wisconsin, USA IdeaWorksCompany.com

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About Jay Sorensen, Writer of the Report

Jay Sorensen’s research and reports have made him a leading authority on frequent flyer programs and the ancillary revenue movement. He is a regular keynote speaker at the annual MEGA Event, spoke at IATA Passenger Services Symposiums in Abu Dhabi and Singapore, and has testified to the US Congress on ancillary revenue issues. His published works are relied upon by airline executives throughout the world and include first-ever guides on the topics of ancillary revenue and loyalty marketing. He was acknowledged by his peers when he received the Airline Industry Achievement Award at the MEGA Event in 2011.

Mr. Sorensen is a veteran management professional with 30 years experience in product, partnership, and marketing development. As president of the IdeaWorksCompany consulting firm, he has enhanced the Jay, with son Aleksei and daughter generation of airline revenue, started loyalty programs and Annika, in North Cascades National co-branded credit cards, developed products in the Park in Washington. service sector, and helped start airlines and other travel companies. His career includes 13 years at Midwest Airlines where he was responsible for marketing, sales, customer service, product development, operations, planning, financial analysis and budgeting. His favorite activities are hiking, exploring and camping in US national parks with his family.

About Eric Lucas, Editor of the Report

Eric Lucas is an international travel, culture and natural history writer and editor whose work appears in Michelin travel guides, Alaska Airlines Magazine, Westways Magazine and numerous other publications. Founding editor of Midwest Airlines Magazine, he is the author of eight books, including the 2017 Michelin Alaska guide. Eric has followed and written about the travel industry for more than 25 years. He lives on San Juan Island, Washington, where he grows organic garlic and heirloom corn; visit him online at TrailNot4Sissies.com.

Eric, at his favorite summer retreat, Steens Mountain, Oregon.

Disclosure to Readers of this Report IdeaWorksCompany makes every effort to ensure the quality of the information in this report. Before relying on the information, you should obtain any appropriate professional advice relevant to your particular circumstances. IdeaWorksCompany cannot guarantee, and assumes no legal liability or responsibility for, the accuracy, currency or completeness of the information. The views expressed in the report are the views of the author, and do not represent the official view of CarTrawler.

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2017 CarTrawler Yearbook of Ancillary Revenue Summary of the Results

The importance and prevalence of ancillary revenue continues to move forward with an ever larger footprint on airline financial statements and the products offered to consumers. Back in 2007 the top ten airlines, as rated by total ancillary revenue, generated $2.1 billion. Fast forward to financial results of 2016 (shown in Table 1) and the top ten tally has leapt to more than $28 billion. Yet the challenges faced by the world’s economy reinforce the need for airlines to rely upon ancillary revenue as a tool to serve the needs of consumers and investors.

Table 1: Top 10 Airlines – Total Ancillary Revenue (US dollars) Approximate Sources of Revenue Annual Results – 2016 Frequent Flyer A la Carte Travel Retail Program Such As bags Commissions $6,222,000,000 United 48% 52% $5,172,400,000 Delta 52% 48% $4,901,000,000 American 43% 57% $2,832,800,000 Southwest 80% 20% $2,100,771,801 Air France/KLM 33% 67% $1,982,255,301 Ryanair None 100% $1,355,078,078 * easyJet None 100% $1,349,812,715 * Lufthansa Network 57% 43% $1,193,698,000 Qantas (excludes Jetstar) 90% Limited disclosure $1,179,131,138 Air Canada 45% 55% 2016 carrier results were based upon recent 12-month financial period disclosures. * IdeaWorksCompany estimate based upon updated past disclosure and other sources.

Total ancillary revenue is presented in a different manner this year to emphasize how airlines produce it. Most top ten airlines earn their place on the table through the robust revenue contribution of a frequent flyer program. Specifically, these billion-dollar amounts are generated by the sale of miles or points to banks that issue a carrier’s co-branded credit card. But on this table of giants, Ryanair and easyJet are the exception; their ancillary revenue ranking occurs through a reliance on a la carte fees and the commissions earned from travel retail activities at the website, such as car hire bookings and travel insurance sales. The full description of ancillary revenue is offered on the next page.

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Financial documents for 138 airlines were reviewed

Every year since 2007, IdeaWorksCompany searches for disclosures of financial results which qualify as ancillary revenue for airlines all over the globe. Annual reports, investor presentations, financial press releases, and quotes attributed to senior executives all qualify as sources in the data collection process. Of the 138 airlines reviewed, 66 were found to reveal financial results related to ancillary revenue. This represents a nearly threefold increase from the 23 airlines which disclosed ancillary revenue 11 years ago.

IdeaWorksCompany offers a definition of Ancillary Revenue Revenue beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as a part of the travel experience.

IdeaWorksCompany further defines ancillary revenue using these categories: 1) a la carte features, 2) commission-based products, 3) frequent flyer activities, 4) miscellaneous sources such as advertising, and 5) the a la carte components associated with a fare or product bundle.

From this list, total airline revenue and ridership data were collected to determine the top ten airlines in overall ancillary revenue, as a percentage of company revenue, and on a per passenger basis. The results for the 66 disclosing airlines are described in the airline listings which follow this summary section.

Ancillary revenue as a percent of total revenue favors low cost carriers

It’s a logical corollary that airlines with low average fares achieve the best “percent of total revenue” results. Table 2 is dominated by the leading low cost carriers in the world, and nearly all demonstrate sizeable increases since 2011. Measurement by percentage is a reliable indicator because it removes the factor of global currency fluctuations.

Table 2: Top 10 Airlines – Ancillary Revenue as a % of Total Revenue Ancillary Compared to their Annual Results – 2016 Source 2011 Results 46.4% Spirit Various 33.2% ↑13.2 points 42.4% Frontier Various 7.7% ↑34.7 points 40.0% Allegiant Various 27.0% ↑13.0 points 39.4% Wizz Air Various 27.9% ↑11.5 points 26.8% Ryanair Various 20.5% ↑6.3 points 26.0% Jet2.com Various 27.1% ↓-1.1 points 24.3% Volaris Various 9.5% ↑15.3 points 24.0% HK Express Various Carrier began operations in 2013 22.0% Jetstar Various 15.3% ↑6.7 points 22.0% Pegasus Various 10.1% ↑11.9 points 2016 and 2011 carrier results were based upon 12-month financial period disclosures.

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Let’s examine the results for Frontier Airlines as a very robust example. Thanks to Frontier’s 2017 filing for an initial public offering of shares, there are new disclosures of the carrier’s ancillary revenue prowess. The carrier’s systemwide total revenue per passenger was a modest $114.75 for 2016. That’s the average revenue associated with a passenger and includes about $49 generated by ancillary revenue. A good portion of this amount includes the optional extras passengers can buy such as checked bags, seat assignments, and snacks onboard. A small portion of the $49 is also composed of revenue produced by Frontier’s frequent flyer program and commissions from car hire and hotel bookings.

The airline was remade as an ultra low-cost carrier (ULCC) during 2014 after Indigo Partners acquired Frontier.1 For 2013 the airline carried 10.8 million passengers2 and for 2016 this jumped to 14.9 million on the strength of new ownership, management, and the low fares made possible by the a la carte method. Numbers reveal the truth – consumers embrace the choices delivered by the branded fare approach. They can click to choose maximum savings or buy up to add comfort and convenience.

Worldwide the a la carte approach long embraced by low cost carriers has been adopted by network airlines. Within the US, American, Delta, and United recently introduced basic economy fares (sometimes called seat-only fares) to compete with Frontier and Spirit. These fares reduce the product to a minimalist experience with fees charged for bags and early seat assignments, no elite upgrades, and a ban on flight changes. Yet when presented with higher fare, better service options, the majority of consumers opt to spend more.

Recent comments by Scott Kirby, the president of United, reveal 60 to 70 percent of passengers buy a higher fare when presented with the Basic Economy option.3 American disclosed similar results with 50 percent of customers buying the Main Cabin product when presented the opportunity to consider the lower priced Basic Economy branded fare.4

Elsewhere in the world, the practice has been adopted by Air France/KLM, British Airways, and Lufthansa as these airlines compete with the likes of Ryanair, easyJet, and Norwegian. In other regions of the world, basic fares remain a concept to be considered for the near future. That’s the revenue power implicit when consumers are offered a choice to save money or spend more . . . most often they spend more.

The ancillary revenue pie is unique for every airline

In the process of collecting data for this Yearbook, IdeaWorksCompany makes note when details regarding the sources of ancillary revenue are identified. For some airlines, such as British Airways, Delta, and easyJet, the range of disclosures from financial filings and government data provides a rather complete picture of ancillary revenue. Some airlines, such as HK Express, have chosen to directly disclose their ancillary revenue to IdeaWorksCompany for inclusion in the Yearbook.

1 Frontier Group Holdings SEC Form S-1 Registration Statement dated 31 March 2017. 2 Frontier Group Holdings SEC Form S-1 Registration Statement dated 31 March 2017. 3 SkyMoney section of Airline Weekly dated 12 June 2017. 4 American presentation at Bank of America Merrill Lynch Conference dated 18 May 2017.

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IdeaWorksCompany reviewed the data and made a few adjustments. For example, for British Airways, revenue information was found in the annual reports and investor presentations of IAG, British Airways Holidays, and Avios, and in UK government data. “Other activities” were added to equal 0.5% of airline revenue to account for sources such as car hire and trip insurance commissions. Colors assigned to pie slices vary, however blue shading always designates baggage revenue with red for frequent flyer programs/co-branded credit cards.

Global Carrier Examples

British Airways Delta Air Lines 2016 Ancillary Revenue Sources 2016 Ancillary Revenue Sources Based upon disclosures and estimates Based upon disclosures and estimates

BA Holidays Baggage Economy Income 17% Branded Fares 21% Other Activities 9% 11% Assigned Seats Other Activities 13% 4% FFP/Co- Branded Card Comfort+ FFP/Co- 54% Seating Baggage Branded Card 6% 13% 52%

Low Cost Carrier Examples

easyJet Hong Kong Express 2016 Ancillary Revenue Sources 2016 Ancillary Revenue Sources Based upon disclosures and estimates Based upon company disclosures

Credit Card Trip Insurance Flexi Fares a la Fees Assigned Seats Other Fees Carte 5% 9% Component 12% 17% easyJet Plus Hotel, Car Memberships Hire, Holidays, 7% Inclusive Fares a FFP la Carte 1% Assigned Seats Component 9% Baggage 7% 68% Onboard Retail and Other Baggage Onboard and 10% 47% Other 8%

The large slices of blue demonstrate the importance of fees for checked baggage. The slices are smaller for global carriers which continue to include a checked bag on their long-haul routes, such as transatlantic flights. But where Delta and British Airways may have a smaller slice of bag revenue, they certainly generate lots of cash from their frequent flyer programs. The vast majority of activity occurs when airlines sell miles to the banks that issue co- branded cards such as the Delta SkyMiles card issued by American Express.

Branded fares, based upon the “good, better, and best” method of retailing, also contribute to ancillary revenue as shown in the Delta and easyJet examples. The entire fare is not counted as ancillary revenue, but rather the premium above the basic economy fare level is measured. Fees assessed for assigned seating are another method for airlines to boost the bottom line. These fees do tread close to the model defined by low cost carriers; adoption of this practice does pose a risk to the perceived quality of global airlines.

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Global and low cost carriers earn top ancillary revenue per passenger

The top performing airlines, when ancillary revenue is expressed on a per passenger basis, are a varied collection (Table 3 below). The definition of ancillary revenue includes the results produced by a carrier’s frequent flyer program and this can provide a substantial benefit for global airlines such as Delta, Qantas, and United. For some airlines, this represents billions in revenue as shown in Table 4 (on the following page) and allows these airlines to remain competitive when ancillary revenue is measured on a per passenger basis.

Low cost carriers rely upon a la carte activity by aggressively seeking revenue from checked bags, assigned seats, and extra leg room seating. Some of the best in this category have extensive holiday package business with route structures built upon leisure destinations. Allegiant in the US and Jet2.com in the UK share the common bond of emphasizing leisure travel; these are essentially holiday package companies that own an airline.

Table 3: Top 10 Airlines – Ancillary Revenue per Passenger Annual Results – 2016 Ancillary 2016 and 2011 Comparison (in US dollars)** Source (Both years in local currency – no conversion) Spirit $49.89 Various 19.5% US dollars Allegiant $48.93 Various 43.9% US dollars Frontier $48.60 Various 434.1% US dollars United $43.46 Various 19.2% US dollars Jet2.com $42.46 Various 18.9% GB pounds Qantas Airways $42.38 Mostly FFP 8.2% AUS dollars Virgin Atlantic * $42.25 Mostly FFP 2011 comparison not available AirAsia X $34.41 Various +12.2% Malaysian ringgit Korean Air $32.59 Various +12.8% Korean won Alaska Air Group $31.41 Various +27.6% US dollars 2016 and 2011 carrier results were based upon 12-month financial period disclosures. * IdeaWorksCompany estimate based upon past disclosure updated for current report.

Significant fluctuations of global currencies suggest using the US dollar as the basis of comparison does not effectively convey historical trends. The left side of Table 3 displays 2016 ancillary revenue in US dollars, while the right side expresses the 5-year increase without currency conversion. For example, the 2011 per person ancillary revenue for AirAsia X is compared to 2016 based upon Malaysian ringgit results. This provides a pure comparison without the influence of a strong or weak dollar during the time period.

The results demonstrate the onward march of ancillary revenue on a per passenger basis for these ancillary revenue giants. Frontier’s eye-popping increase is largely based upon the airline’s conversion to the ULCC (Ultra Low Cost Carrier) model described earlier in this report. Other factors are at play here too. Airlines are beginning to manage a la carte fees in the same manner as air fares. Lowering some fees might produce more overall revenue if it encourages more consumers to say “yes” to buy a product. Likewise, prices might be increased if consumers demonstrate they “gotta have” a particular service at any price.

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This is the classic rule of demand and supply ― the invisible hand of the marketplace defined by the economist Adam Smith. Technology is rapidly being promoted to support what is called dynamic pricing; this is the ability to make prices conditional upon a defined set of factors. But caution is warranted here. Just because you can do it . . . doesn’t mean you should. Consumers, employees, regulators, and investors need to be on board with these changes through careful ― not careless ― communication and training.

FFPs are a monetary mileage marvel

Table 1 at the beginning of this section showed how some carriers truly benefit from the revenue boost of a frequent flyer program with a powerful co-branded portfolio. Table 4 adds detail to this presentation by carving out sample frequent flyer revenue data from a few select airlines.

Table 4: Ancillary Revenue Attributed to Frequent Flyer Programs Program Name FFP Revenue Per Passenger United MileagePlus $3,022,000,000 $21.11 Qantas Frequent Flyer $1,088,173,600 $21.14 Avios – IAG (BA & Iberia) $539,109,946 $5.36 Azul TudoAzul $218,633,950 $10.60 Japan Airlines Mileage Bank $198,887,813 $4.86 Aeroflot Bonus $185,062,151 $4.26 South African Voyageur $59,446,855 $8.59 2016 results based upon recent 12-month financial period disclosures and IdeaWorksCompany calculations.

The co-branding strength of some global regions is apparent with big per passenger results posted by airlines in the US, Australia, and Brazil. The power of these programs is readily apparent when per passenger numbers are evaluated with United and Qantas scoring an average of $21+ for every passenger carried. Adding another detail, such as program membership, Qantas Group realizes more than $95 per member based upon 2016 program membership of 11.4 million. The Group backs this result with an amazing statistic: “35 percent of credit card spend in Australia is on Qantas co-branded credit cards.” 5 It’s an almost otherworldly achievement to have so much of a nation’s commerce pass through an airline marketing program.

Quo vadis? Or, where is your airline going?

The pace of change can be overwhelming, and it can be easy to lose one’s way. In the political arena, what once seemed impossible now seems probable. The same has become true for airlines and the travel industry. Look at what the past 12 months have brought us: 1) Lufthansa is absorbing a good-sized portion of airberlin, 2) IAG has started a long-haul low-cost airline, 3) American, Delta, and United have adopted the basic fare products of their ultra low-cost competitors, and 4) Norwegian Airlines is planning a domestic airline in Argentina. It’s an unpredictable world.

5 Qantas Investor Day Presentation, 05 May 2017, page 75.

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But wait, there’s more. As of preparation of this report, Qatar Airways has been isolated geographically and economically from neighboring countries. The bright futures of Emirates, Etihad, and Turkish have been tarnished by unplanned incidents ranging from a Trump Administration laptop ban to an attempted government coup. Management is often called upon to respond quickly to change, but this can also be called being “reactionary.”

It’s exactly times like these that call for a diligent and thoughtful pace. Don’t add a la carte fees because your airline needs the cash. Embrace the ancillary revenue path only if your airline brand and employees are aligned with it. IdeaWorksCompany offers the five steps below for your consideration.

How to find your ancillary revenue path in 5 steps

1. Understand the opportunity. Ensure top management understands the need for ancillary revenue and the many options for implementation. Get outside help to innovate and illuminate. 2. Brand the mission. Create a robust ancillary revenue branding statement for your airline as it applies to customers, employees, and investors. This should support the carrier’s core brand. 3. Lead the initiative. Staff the ancillary revenue function with a diplomat who will encourage others to build, manage, and maximize their ancillary revenue portfolios. 4. Listen to employees. They represent the wisdom of those who touch the customer; earning their support will create happy customers and better revenue. 5. Focus, focus, focus. Take care in selecting products which are important to customers, represent natural advantages for your airline, and are difficult for your competitors to match.

Has your airline done all of these, or have some been skipped for the sake of expediency?

Successful, vibrant, and progressive organizations ― be they corporate or political ― work to establish clarity in direction, culture, and ethics. This allows anyone in the organization to instinctively know which path to take when crossroads are approached. Quo vadis then becomes a question to which everyone in the organization knows the answer.

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Specific ancillary services identified in this Yearbook Airlines are increasingly more revealing about their approach to ancillary revenue. During the course of its global review of ancillary revenue activities, IdeaWorksCompany uncovered the following examples for 2016:

 Aeromexico encourages easy access from the US with its Cross Border Express (Tijuana- San Diego) walking option from San Diego to the Tijuana Airport priced at $16.

 Air France/KLM sent members of its Flying Blue frequent flyer program more than 250 million emails during 2016, which is an average of 9.3 emails per member.

 AirAsia Group integrated its supply chain by acquiring an 80% stake in coffee roaster T&Co, which developed an Asean blend of coffee specifically for passengers.

 AirAsia X broke with LCC tradition by opening an airport lounge. The Premium Red Lounge at Kuala Lumpur provides 24-hour service, a buffet, and even showers.

 Alaska Airlines credit cards are held by 30% of its frequent flyer membership and its Mileage Plan program represents a healthy 12% of the group's total revenues.

 Delta increased its Comfort+ load factor by 15 points to 46%. This premium economy product was introduced May 2016 and had forecasted to generate up-sell revenue of $300 million during the second half of the year.

 EasyJet features the “Earlier Flight” option on its mobile application, which allows travelers to switch flights on short notice on the day of travel for the modest cost of £15.

 Eurowings saw 76% of its passengers opting to not accrue frequent flyer miles, while 18% accrued in Miles & More, and 6% accrued the carrier’s in-house Boomerang Club.

 Hawaiian realized approximately $50 million from the sale of Extra Comfort and Preferred seating.

 JetBlue generated estimated incremental revenue of $260 million from its branded fare offer, which is significantly higher than the $100 million amount for 2015.

 Qantas estimates its co-branded credit card activity represents an amazing 35% of all credit card spending in Australia.

 South African Airways had 31.4% of passengers active in the Voyageur frequent flyer program, with these members representing nearly 30% of airline revenue.

 United disclosed its Mileage Plus frequent flyer database is an asset valued at $1.177 billion.

 Virgin Australia had 1 million of its Velocity frequent flyer members accrue points at BP Petrol stations since April 2015 (out of a total membership of 6.3 million).

 Wizz Air sold 10,548,710 chocolate bars (a take rate of about 8%) and 8.9 million cups of coffee (a take rate of about 7%) to its customers during 2016.

Currency exchange based upon rates in effect when financial information was reviewed for each annual period.

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Ancillary Revenue Defined

The definition of ancillary revenue offered by IdeaWorksCompany in 2008 has been adopted all over the world and has become accepted as the industry standard. For 2015 the definition has been updated to recognize the growing importance of fare bundles by adding a fifth category to include ancillary revenue generated by “the a la carte components associated with a fare or product bundle.”

Ancillary Revenue Defined Revenue beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as a part of the travel experience.

IdeaWorksCompany further defines ancillary revenue using these categories: 1) frequent flyer activities, 2) a la carte features, 3) commission-based products, 4) advertising sold by the airline, and 5) the a la carte components associated with a fare or product bundle.

To add more clarity to this declaration, IdeaWorksCompany offers these explanations:

 Frequent Flyer Programs: The frequent flyer category largely consists of the sale of miles or points to program partners such as hotel chains and car rental companies, co-branded credit cards, online malls, retailers, and communication services. Miles or points sold directly to program members also qualify.

 A la Carte Features: These represent the items on the ancillary revenue menu and consist of the amenities consumers can add to their air travel experience. The list continues to grow and the following are typical activities: 1) onboard sales of food and beverages, 2) checking of baggage and excess baggage, 3) assigned seats or better seats such as exit rows, 4) call center support for reservations, 5) fees charged for purchases made with credit or debit cards, 6) priority check-in and screening, 7) early boarding benefits, 8) onboard entertainment systems, and 9) wireless internet access.

 Commission-Based Products: Ancillary revenue activities also include the commissions earned by airlines on the sale of hotel accommodations, car rentals and travel insurance. The commission-based category primarily involves the airline‘s website, but it can include the sale of duty-free and consumer products onboard aircraft.

 Advertising Sold by the Airline. This category includes any advertising initiative linked to passenger travel. The following are typical activities: 1) revenue generated from the inflight magazine, 2) advertising messages sold in or on aircraft, loading bridges, gate areas, and airport lounges, and 3) fee-based placement of consumer products and samples.

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 Fare or Product Bundles. Airlines may allocate a portion of the price associated with a fare bundle or product bundle as ancillary revenue. This is determined by assigning a revenue value to the services included in the bundle, such as checked baggage, early boarding, and extra leg room seating.

The list is not intended to be exhaustive or complete; human imagination, including in business, is infinite. However, caution is advised when considering revenue sources not linked to the passenger travel experience. This includes air cargo, mail revenue, ground handling, and inflight kitchen operations. Some carriers consider this ancillary revenue, but they are best included in the category of other revenue. About Individual Airline Listings

The individual airline listings are intended to clarify the type of ancillary revenue activity attributed to each airline in this report. Some airlines are vague in their descriptions and merely provide an “ancillary revenue” line on the income statement without further details. Some of the carriers don’t specifically list ancillary revenue, but describe qualifying activities such as “revenue from the sale of frequent flyer miles to partners” or “onboard retail including food and merchandise.” Other airlines provide extensive details and seem very proud of their ancillary revenue accomplishments. Airlines sometimes choose to provide additional information in the presentations made to investment analysts.

The Total Revenue and Passenger numbers for each airline are intended to reflect the activities associated with the generation of ancillary revenue. Financial figures have been converted to dollars with the exception of information provided in the Notes from Financial Reports box for each listed. The exchange rates used are listed at the end of this report. Group results may apply for some airline listings. For example, activity reported for the Alaska Air Group includes Alaska Airlines and Horizon Air.

The explanatory material provided for each reporting airline is an edited version of information found in sources such as financial statements, annual reports, analyst research, and investor relations presentations. The greater length of some listings, such as Allegiant Air, indicates the company dedicated more space in its reports to the topic of ancillary revenue. Interpretation by IdeaWorksCompany provides added context regarding the unique qualities of a carrier’s a la carte activity. A la Carte Services Sold through GDS

This 2017 edition of the CarTrawler Yearbook of Ancillary Revenue by IdeaWorksCompany includes a list of items sold through Amadeus, Sabre, and Travelport for each of the 66 disclosing airlines. The information for these entries was collected from GDS websites or materials provided by the GDS; IdeaWorksCompany is not responsible for the accuracy or veracity of the claims made by these vendors.

Listings for individual airlines display a la carte capabilities enabled by GDS. However, these might not reflect services which an airline is actively selling through a GDS. For example, some may be planned for future introduction, or have been withheld from GDS display. Smaller airlines within a group, such as Hop! for Air France/KLM, are not included in the services listed.

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The following provides additional details for the listings associated with each of the three GDS companies:

 Amadeus data was retrieved from its Airline Merchandising website during August 2017. Amadeus advises the website is continuously updated. The following provides additional detail for some of the a la carte items: 1) Bundled fares may refer to the branded fare or fare family method. Typically these provide 2 or 3 choices (each offering a defined list of services) for a seat booked on a flight; 2) Meals are pre- ordered meals for a fee; and 3) Paid seats may include seat assignments, extra leg room seats, and preferred seating.

 Sabre data was retrieved from its Air Merchandising website during August 2017. Sabre advises the website is continuously updated. The following provides additional detail for some of the a la carte items: 1) Bundled fares may refer to the branded fare or fare family method. Typically these provide 2 or 3 choices (each offering a defined list of services) for a seat booked on a flight. 2) Meals are pre-ordered meals for a fee. 3) Paid seats may include seat assignments, extra leg room seats, and preferred seating.

 Travelport includes their GDS brands: Apollo, Galileo, and Worldspan. The inclusion of a la carte services varies by brand for individual airline and country. Data was gathered by IdeaWorksCompany during August 2017 at the Travelport website (travelport-communications.com/ancillary). The information presented applies for the home market of each airline (such as Ireland for Aer Lingus). A la carte services were typically offered in many countries for each carrier and were too numerous to list. The following provides additional detail for some of the a la carte items: 1) Meals may include pre-order meals (paid) and special meal requests (non-paid); and 2) paid seats may include seat assignments, extra leg room seats, and preferred seating. Premium services refers to GDS support for Ryanair's Business Plus product (and similar services for other airlines).

The phrase “paid seats” is used by GDS companies to describe a la carte services associated with seating, such as extra legroom seating, exit row seating, and pre-assignment of seats. “Medical assistance” can include inflight oxygen provided by the airline, for example Ryanair allows passengers to book access to therapeutic oxygen for a fee of €50 or £50 per flight. Sometimes a GDS will list medical assistance as an a la carte capability for an airline client, but the airline does not charge a fee for the service.

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Ancillary Revenue Data and Graphs

Airlines Posting Ancillary Revenue Results For most recent 2016 full-year period, listed in alphabetical order. Ancillary % of Total US$ per Carriers Region See bottom for icon legend Revenue in US$ Revenue Passenger Aer Lingus $247,855,428 12.6% $20.93 Europe and Russia Aeroflot $206,136,677 3.3% $4.75 Europe and Russia Aeromexico $175,736,471 6.0% $8.92 The Americas Air Arabia $61,716,121 6.0% $7.68 Middle East and Africa Air Canada $1,179,131,138 10.4% $26.29 The Americas Air France/KLM * $2,100,771,801 7.6% $22.48 Europe and Russia Air Greenland $9,650,899 4.9% $22.65 Europe and Russia AirAsia Group $556,725,395 18.7% $9.84 Asia / South Pacific AirAsia X $161,330,156 16.0% $34.41 Asia / South Pacific Airberlin $244,148,446 5.8% $8.44 Europe and Russia Alaska Air Group $1,063,900,000 17.9% $31.41 The Americas Allegiant $544,482,000 40.0% $48.93 The Americas American $4,901,000,000 12.2% $24.66 The Americas ANA All Nippon $77,995,221 0.5% $1.50 Asia / South Pacific Avianca (FF) $154,245,000 3.5% $5.23 The Americas Azul (FF) + $218,633,950 10.6% $10.60 The Americas British Airways * $666,584,219 4.4% $15.10 Europe and Russia Cebu Pacific $165,540,893 12.6% $8.65 Asia / South Pacific China Eastern $467,820,776 3.1% $4.60 Asia / South Pacific China Southern $93,924,827 0.5% $0.82 Asia / South Pacific Delta $5,172,400,000 13.1% $28.15 The Americas easyJet * $1,355,078,078 21.9% $18.54 Europe and Russia Emirates $106,726,308 0.5% $1.90 Middle East and Africa Ethiopian $70,328,225 2.8% $9.16 Middle East and Africa Eurowings + $229,101,083 10.0% $12.43 Europe and Russia Finnair $139,791,549 5.4% $12.86 Europe and Russia flydubai $187,860,083 13.8% $18.06 Middle East and Africa Frontier $726,000,000 42.4% $48.60 The Americas Garuda $63,864,766 1.7% $1.82 Asia / South Pacific GOL $340,738,250 11.2% $10.44 The Americas Hawaiian $236,498,280 9.7% $21.41 The Americas HK Express $90,740,388 24.0% $31.19 Asia / South Pacific Icelandair Group + $104,892,000 8.2% $26.22 Europe and Russia Indigo $168,827,770 5.9% $3.88 Asia / South Pacific JetBlue $956,575,000 14.4% $25.00 The Americas

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Ancillary % of Total US$ per Carriers Revenue in Region See bottom for icon legend Revenue Passenger US$ Japan Airlines (FF) $209,270,927 1.9% $5.11 Asia / South Pacific Jazeera Airways $13,190,554 7.5% $10.90 Middle East and Africa Jejuair + $50,625,179 7.8% $5.89 Asia / South Pacific Jet Airways + $264,574,684 8.4% $10.24 Middle East and Africa Jet2.com $257,761,744 26.0% $42.46 Europe and Russia JetBlue $956,575,000 14.4% $25.00 The Americas Jetstar $599,508,814 22.0% $25.73 Asia / South Pacific Korean Air $874,724,678 8.6% $32.59 Asia / South Pacific LATAM Airlines (FF) $719,481,000 7.6% $10.74 The Americas Lufthansa Network * $1,349,812,715 5.5% $14.71 Europe and Russia Nok Air $41,736,341 8.6% $4.88 Asia / South Pacific Norwegian $496,360,042 15.9% $16.94 Europe and Russia Pegasus $282,067,210 22.0% $11.70 Europe and Russia Qantas Airways (FF) $1,193,698,000 12.7% $42.38 Asia / South Pacific Qatar Airways $640,672,651 6.0% $20.02 Middle East and Africa Rex Regional Express $1,774,456 0.9% $1.62 Asia / South Pacific Royal Jordanian $6,683,112 0.8% $2.23 Middle East and Africa Ryanair $1,982,255,301 26.8% $16.52 Europe and Russia SAS Scandinavian + $29,867,312 0.6% $1.03 Europe and Russia South African (FF) + $59,446,855 2.9% $8.59 Middle East and Africa Southwest (FF) $2,832,800,000 13.9% $18.67 The Americas SpiceJet $97,250,745 10.3% $7.81 Asia / South Pacific Spirit $1,078,477,000 46.4% $49.89 The Americas Spring Airlines $106,247,764 8.4% $7.47 Asia / South Pacific Sun Country $50,385,000 9.7% $28.10 The Americas United $6,222,000,000 17.0% $43.46 The Americas Vietjet + $134,770,342 18.9% $9.59 Asia / South Pacific Virgin Atlantic (FF) $229,684,101 6.4% $42.25 Europe and Russia Virgin Australia (FF) $245,175,840 6.5% $10.34 Asia / South Pacific Volaris $311,195,673 24.3% $20.74 The Americas WestJet $302,241,178 9.5% $13.77 The Americas Wizz Air $664,284,984 39.4% $30.43 Europe and Russia 2016 carrier results were based upon recent 12-month financial period disclosures. * IdeaWorksCompany estimate based upon past disclosure updated for current Yearbook. (FF) 80% or more of carrier’s ancillary revenue is produced by its frequent flyer program. Please refer to individual carrier listings for details. + New carrier listing for this Yearbook.

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Ancillary Revenue as a % of Total Revenue - 2016 Airlines ranked 1 through 40

Spirit 46.4% Frontier 42.4% Allegiant 40.0% Wizz Air 39.4% Ryanair 26.8% Jet2.com 26.0% Volaris 24.3% HK Express 24.0% Jetstar 22.0% Pegasus 22.0% easyJet * 21.9% Vietjet + 18.9% AirAsia Group 18.7% Alaska Air Group 17.9% United 17.0% AirAsia X 16.0% Norwegian 15.9% JetBlue 14.4% Southwest (FF) 13.9% flydubai 13.8% Delta 13.1% Qantas Airways (FF) 12.7% Aer Lingus 12.6% Cebu Pacific 12.6% American 12.2% GOL 11.2% Azul (FF) + 10.6% Air Canada 10.4% SpiceJet 10.3% Eurowings + 10.0% Sun Country 9.7% Hawaiian 9.7% WestJet 9.5% Nok Air 8.6% Korean Air 8.6%

Jet Airways + 8.4% * IdeaWorksCompany estimate based upon past Spring Airlines 8.4% disclosure updated for current Yearbook. (FF) 80% or more of carrier’s ancillary revenue Icelandair Group + 8.2% is produced by its frequent flyer program. Jejuair + 7.8% + New carrier listing for this Yearbook. Air France/KLM * 7.6% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

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Ancillary Revenue as a % of Total Revenue - 2016 Airlines ranked 41 through 66

LATAM Airlines (FF) 7.6% Jazeera Airways 7.5% Virgin Australia (FF) 6.5% Virgin Atlantic (FF) 6.4% Air Arabia 6.0% Qatar Airways 6.0% Aeromexico 6.0% Indigo 5.9% Airberlin 5.8% Lufthansa Network * 5.5% Finnair 5.4% Air Greenland 4.9% British Airways * 4.4% Avianca (FF) 3.5% Aeroflot 3.3% China Eastern 3.1% South African (FF) + 2.9% Ethiopian 2.8% Japan Airlines (FF) 1.9% Garuda 1.7% Rex Regional Express 0.9% Royal Jordanian 0.8% * IdeaWorksCompany estimate based upon past SAS Scandinavian + 0.6% disclosure updated for current Yearbook. (FF) 80% or more of carrier’s ancillary revenue China Southern 0.5% is produced by its frequent flyer program. Emirates 0.5% + New carrier listing for this Yearbook. ANA All Nippon 0.5%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

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Ancillary Revenue in US$ per Passenger - 2016 Airlines ranked 1 through 40 Spirit $49.89 Allegiant $48.93 Frontier $48.60 United $43.46 Jet2.com $42.46 Qantas Airways (FF) $42.38 Virgin Atlantic (FF) $42.25 AirAsia X $34.41 Korean Air $32.59 Alaska Air Group $31.41 HK Express $31.19 Wizz Air $30.43 Delta $28.15 Sun Country $28.10 Air Canada $26.29 Icelandair Group + $26.22 Jetstar $25.73 JetBlue $25.00 American $24.66 Air Greenland $22.65 Air France/KLM * $22.48 Hawaiian $21.41 Aer Lingus $20.93 Volaris $20.74 Qatar Airways $20.02 Southwest (FF) $18.67 easyJet * $18.54 flydubai $18.06 Norwegian $16.94 Ryanair $16.52 British Airways * $15.10 Lufthansa Network * $14.71 WestJet $13.77 Finnair $12.86 Eurowings + $12.43 Pegasus $11.70 * IdeaWorksCompany estimate based upon past Jazeera Airways $10.90 disclosure updated for current Yearbook. (FF) 80% or more of carrier’s ancillary revenue LATAM Airlines (FF) $10.74 is produced by its frequent flyer program. Azul (FF) + $10.60 + New carrier listing for this Yearbook. GOL $10.44 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00

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Ancillary Revenue in US$ per Passenger - 2016 Airlines ranked 41 through 66

Virgin Australia (FF) $10.34 Jet Airways + $10.24 AirAsia Group $9.84 Vietjet + $9.59 Ethiopian $9.16 Aeromexico $8.92 Cebu Pacific $8.65 South African (FF) + $8.59 Airberlin $8.44 SpiceJet $7.81 Air Arabia $7.68 Spring Airlines $7.47 Jejuair + $5.89 Avianca (FF) $5.23 Japan Airlines (FF) $5.11 Nok Air $4.88 Aeroflot $4.75 China Eastern $4.60 Indigo $3.88 Royal Jordanian $2.23 Emirates $1.90 Garuda $1.82 * IdeaWorksCompany estimate based upon past Rex Regional Express $1.62 disclosure updated for current Yearbook. (FF) 80% or more of carrier’s ancillary revenue ANA All Nippon $1.50 is produced by its frequent flyer program. SAS Scandinavian + $1.03 + New carrier listing for this Yearbook. China Southern $0.82

$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00

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Europe and Russia

Aer Lingus Source and Type Multiple ancillary revenue activities Ancillary Revenue $247,855,428 As a % of Revenue 12.6% Dollars per Passenger $20.93 Financial Period Calendar year 2016 Total Revenue $1,967,106,575 Passengers 11,840,000 (estimate) Information Source IAG Full Year Results Announcement for the Year Ended 31 December 2016, Company Profile at AerLingus.com, and Aer Lingus First Half Results dated 29 July 2015 Ancillary Revenue  All figures below are in euros. Definitions and Other  Aer Lingus is owned by IAG International Airlines Notes from Financial Group (as of 18 August 2015). IAG only discloses traffic Reports for the Group and not for its individual airline holdings. IdeaWorksCompany estimated Aer Lingus 2016 traffic to be 11,840,000 passengers based upon other disclosures such as RPM increases and other published traffic sources.  For the first six months of 2015, retail revenue (ancillary revenue) was €94.5 million with total revenue of €749 million. Using these results, retail revenue represented 12.6% of total revenue. Aer Lingus also disclosed retail revenue was €20.42 per passenger. Retail revenue per passenger improved 4.3% for the first half reflecting increases in online booking fees, baggage and seat selection fees.  The above percent of revenue statistic was used to calculate an annual ancillary revenue result of €222,516,000 for 2016 (total revenue x 12.6%). Dividing this amount by passenger traffic also generates a result of €18.79 per passenger. This is lower than 2015, which is consistent with the carrier’s greater long haul activity which includes a first checked bag and meal service as included services. Intra-Europe services are more a la carte oriented.  In prior years, the airline has defined the following as representing retail revenue: - Checked baggage. - Pre-order meals. - Buy-onboard food and beverage. - Assigned seating. - Sale of commissionable items.

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- Inflight Wifi.  Aer Lingus revenue for 2016: €1,766,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Aeroflot Source and Type Multiple ancillary revenue activities Ancillary Revenue $206,136,677 As a % of Revenue 3.3% Dollars per Passenger $4.75 Financial Period Calendar year 2016 Total Revenue $6,340,792,315 Passengers 43,440,000 Information Source Consolidated Financial Statements for the year ended 31 December 2016, Aeroflot Group 12 Months 2016 Financial Results, and Capital Markets Day - 18 October 2016 Ancillary Revenue  All figures are in Russian rubles (RUB). Definitions and Other  Figures include the operations of Aeroflot Airlines and Notes from Financial principal airline subsidiaries such as Donavia, Rossiya, Reports and Pobeda (LCC).  Duty-free sales for 2016 were RUB 1,349 million. The cost of duty free goods sold was RUB 732 million, representing profit of RUB 617 million, or a mark-up of 84% on cost (mark-up was 93% for 2016).  The frequent flyer program had revenue of RUB 11,846 million from the sale of miles to partners. This was up substantially from the 2015 result of RUB 7,685 million. The program has more than 5.5 million members to date, with 143,000 Elite and Elite+ members (Silver, Gold and Platinum).  Adding the two results provides total ancillary revenue disclosure of RUB 13,195,000,000.  Aeroflot disclosed these activities as sources of ancillary revenue: - Frequent flyer program partner revenue. - Baggage fees. - Seat upgrades (extra leg room and business). - Third-party refueling services, ground handling and

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MRO. - Catering services onboard and Duty Free sales. - Hotel revenue. - Other partnerships – Europcar and DreamLines cruise operator. The list is very broad and includes several activities which IdeaWorksCompany does not qualify as ancillary revenue. As such, the RUB 12.5 billion result (first half of 2016) was not included for Aeroflot.  Aeroflot Group revenue for the year ended 31 December 2016 was RUB 405,880,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares Sabre None Travelport None

Airberlin Source and Type Multiple ancillary revenue activities Ancillary Revenue $244,148,446 As a % of Revenue 5.8% Dollars per Passenger $8.44 Financial Period Calendar year 2016 Total Revenue $4,216,469,553 Passengers 28,920,991 Information Source Air Berlin Annual Report 2016 Ancillary Revenue  All figures are in euros. Definitions and Other  Ancillary revenue for airberlin was provided by the Notes from Financial following activities: Reports - The annual report discloses “ancillary services” of €219,188,000 for 2016. This likely consists of revenue produced by baggage, extra leg room seating, subscription programs, and other services.  Airberlin owns a 30% portion of the topbonus frequent flyer program along with Etihad Airways (70%). Financial transactions occurring with topbonus appear in the annual report. During 2016 airberlin purchased miles for €24,609,000 from topbonus and sold reward seats to the frequent flyer program for €8,122,000. This exchange of miles and rewards with topbonus (which is 70% owned by Etihad Airways) created a net loss during 2016. The program ended 2016 with 4.3 million members.

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 Airberlin revenue for 2016 was: €3,785,400,000. A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Animal transport, baggage, bundled fares, meals, paid seats, sports equipment, unaccompanied minor Sabre Animal transport, baggage, bundled fares, paid seats, unaccompanied minor Travelport Animal transport, baggage, meals, paid seats, sports equipment, unaccompanied minor

Air France/KLM Group Source and Type Multiple ancillary revenue activities Ancillary Revenue $2,100,771,801 As a % of Revenue 7.6% Dollars per Passenger $22.48 Financial Period Calendar year 2016 Total Revenue $27,673,157,281 Passengers 93,442,000 Information Source Full Year 2016 Results Press Release 16 February 2017, Registration Document 2016, and company guidance. Ancillary Revenue  All figures are in euros. Definitions and Other  Air France/KLM made meaningful ancillary revenue Notes from Financial disclosures in its 2016 financial documents. In addition, Reports while not confirming the exact level of ancillary revenue for 2016, the company provided guidance to IdeaWorksCompany for the calculations described below.  The carrier implemented the following ancillary revenue initiatives during 2016: - The a la carte meal offer has been included in the mobile application. - Fee-based advance seating options were added; free seat assignment is available at time of check-in. - Customers may purchase internet access on 787 aircraft. - New basic fares on the European network will not include checked baggage; this has an impact on the number of passengers opting to pay for checked bags.  Air France/KLM disclosed ancillary revenue (Paid Options) was up 12% amounting to €515 million for 2016. Examples of Paid Options include: various seating options in the economy cabin, upgrades paid just before departure, additional allowance for checked bags (in advance or at the airport), lounge access, a la carte meals,

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on board sales (duty free, meals & drinks on Transavia), baggage delivery at home, personalized services at the airport, UM (unaccompanied minor) option for teens, travel insurance, car rentals, hotel bookings, city transfers, "time to think" option to hold a fare, and city tours.  The company also disclosed Other Passenger Sales in its 2016 Registration Document of €833 million. Air France/KLM advised IdeaWorksCompany this activity largely qualifies as ancillary revenue. However, an overlap exists between the €515 million and €833 million disclosures. IdeaWorksCompany estimates this is approximately 10%. Accordingly, the €833 million amount is reduced to €750 million. This activity does not include frequent flyer program revenue.  The following are marketing activities associated with the Flying Blue frequent flyer program: - 2 million members were added during 2016, bringing the total to 27 million by year end. - Ivory members (entry level tier) upon enrollment are entitled to a €10 discount on the first checked bag and a 10% discount on paid seat options. - Immediate inflight enrollment is possible through iPad equipped cabin crew. - The program sent 250+ million emails to members during 2016 (an average of 9.3 per member).  IdeaWorksCompany estimates gross revenue produced by the Flying Blue program was €621 million (27 million members x €23 per member) for 2016. This is based upon disclosures associated with Avios (approximately €25 per member) and Miles & More (approximately €35 per member).  Total ancillary revenue for the Group is estimated to be €1,886,000,000 and is based upon the following items: - €515 million disclosure of Paid Options activity. - €750 million adjusted Other Passenger Sales. - €621 million estimated Flying Blue sales.  Air France/KLM revenue for 2016 was: €24,844,000,000 (including Transavia).

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Animal transport, baggage, bundled fares, paid seats, sports equipment Sabre Baggage, bundled fares, paid seats Travelport Animal transport, baggage, paid seats, sports equipment

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Air Greenland Source and Type Tour and sightseeing revenue sold to passengers Ancillary Revenue $9,650,899 As a % of Revenue 4.9% Dollars per Passenger $22.65 Financial Period Calendar year 2016 Total Revenue $195,670,625 Passengers 426,000 Information Source Annual Report 2016 for Air Greenland Ancillary Revenue  All figures are in Danish kroner (DKK). Definitions and Other  Air Greenland is the principal airline of Greenland and Notes from Financial generates ancillary revenue from tourism-related business Reports produced by hotel and tour operations.  Air Greenland disclosed ancillary revenue of DKK 64,469,000 from the following ancillary revenue activities: - DKK 7,200,000 income (before taxes) for tour operations by Greenland Travel (100% owned by Air Greenland). - DKK 57,269,000 from hotel operations, principally from Hotel Arctic (100% owned by Air Greenland). The airline is the primary method of transportation to the country, which suggests its passengers are the principal customers of Greenland Travel and Hotel Arctic.  Air Greenland revenue for 2016: DKK 1,307,100,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

British Airways Source and Type Multiple ancillary revenue activities Ancillary Revenue $666,584,219 (estimate based upon disclosure of past performance) As a % of Revenue 4.4% Dollars per Passenger $15.10 Financial Period Calendar year 2016 Total Revenue $15,194,667,761 Passengers 44,146,000 (estimate)

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Information Source 2016 Annual Report and Accounts for IAG, British Airways Plc. Annual Report and Accounts 2016, British Airways Holidays Ltd. Annual Report 2015, and Avios Group Ltd. Annual Report 2016 Ancillary Revenue  All figures are in Great Britain pounds (£). Some results Definitions and Other are extrapolated for 2016 from 2013 disclosures. Notes from Financial  British Airways is owned by IAG International Airlines Reports Group. IAG only discloses traffic for the Group and not for its individual airline holdings. IdeaWorksCompany estimated BA’s 2016 traffic to be 44,146,000 passengers based upon other disclosures such as RPM increases and other published traffic sources.  The airline realizes ancillary revenue from BA Holidays. Financial filings made for 2015 with Companies House (UK Government) indicate an operating profit of £45.7 million. Total turnover was £633.9 million which consists of gross package sales. The appropriate result to record as ancillary revenue would be the operating profit. IdeaWorksCompany assumed the same result for 2015.  Revenue which benefitted British Airways, and was associated with the Avios frequent flyer program, was disclosed as being £265 million for 2015 (or £6.11 per passenger). This result was calculated using the pre- reorganization and post-reorganization revenue presented in the “Avios investor seminar/teach-in” dated 08 April 2016. Applying the £6.11 rate to 2016 traffic generates a result of £270 million.  For the entire Avios program, 102 billion points were issued, 84 billion were redeemed during 2016, and points purchased by non-airline partners (such as credit card issuers) were valued at £406 million. The program had 7.8 million active members (very likely representing 24 million total members) during 2016 and total turnover for the program was £749 million (the portion issued to non-air partners was £406 million).  Estimated ancillary revenue (based upon the assumptions noted) for British Airways consists of the following activities: - £45.7 million from BA Holidays. - £66.2 million from seat assignment fees (£1.50 assumed as average rate from £1 disclosure in 2013 multiplied by 44.1 million passengers for 2016). - £63.1 million from checked baggage (£62 million UK CAA disclosure for 2015 for 43.3 million passengers or £1.43 per passenger). - £270 million from Avios (benefiting British Airways). - £57 million from other activities, based upon estimate of 0.5% (0.005) share of total revenue.

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Total 2016 estimated ancillary revenue: £502,000,000.  The estimate was provided to British Airways management prior to publication of this report. The company did not confirm or deny the accuracy of the estimate.  2016 revenue for British Airways was £11,443,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares Sabre Bundled fares Travelport None

easyJet Source and Type Multiple ancillary revenue activities Ancillary Revenue $1,355,078,078 (estimate based upon disclosure of past performance) As a % of Revenue 21.9% Dollars per Passenger $18.54 Financial Period Fiscal year ended 30 September 2016 Total Revenue $6,199,764,378 Passengers 73,100,000 Information Source EasyJet Annual Report and Accounts 2016, 4th Quarter 2016 Earnings Call, and 2014/2015 UK Airline Financial Data – UK CAA Ancillary Revenue  All figures below are in Great Britain pounds (£). Definitions and Other  EasyJet did not disclose its complete ancillary revenue for Notes from Financial the last four fiscal years, however the phrase is repeatedly Reports referenced in its investor materials. Because the airline is a high profile generator of ancillary revenue, IdeaWorksCompany has created an estimate based upon a number of sources such as the airline disclosures and references described below. For its last disclosure in 2012, easyJet revealed ancillary revenue equaling 20.2% of total revenue.  The method used for 2016 generates a modest ancillary revenue result of 21.9% of total revenue. This represents a 9% increase over 2015, which happens to be consistent with the following comment made by Carolyn McCall during the 4th quarter 2016 earnings call, “Ancillary product revenue increased by 9% (for 2016).”  The ancillary revenue story for easyJet is complex because the carrier uses a variety of retail methods. Traditional a

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la carte revenue is largely composed of the carrier’s non- seat revenue and baggage fee disclosures. The carrier also uses fare bundles which include optional services in the price of the higher fare. A portion of this incremental charge represents ancillary revenue activity.  Non-seat revenue: This refers to easyJet’s commission- based activities and buy-onboard sales. The airline negotiates multi-year deals for the delivery of these services by vendors. EasyJet disclosed £82 million was generated from this activity during 2016.  Baggage revenue: EasyJet disclosed ancillary revenue activity to the UK Civil Aviation Authority during 2015 (2016 disclosures were not available during research time). Baggage revenue for FY2014: £428 million (£6.60 per passenger, 64.8 million passengers).  Assigned seating: The carrier also generates revenue from allocated seating. The company disclosed in its 2013 Annual Report (fiscal year ended 30 September 2013) allocated seating contributed 0.9 percentage points of 7.1% constant currency increase in revenue per seat. Expressed another way, allocated seating added 0.9% to the 2012 average fare of £58.51, which would be £0.53. IdeaWorksCompany assumes this activity represented 1.5% of carrier revenues for 2015 and 2016, or £70 million.  easyJet Plus memberships: This subscription product provides allocated seating, dedicated bag drop area, fast track security, speedy boarding, and an additional carry-on bag. The annual price is £170. IdeaWorksCompany assumes 0.5% of the carrier’s annual passengers or 343,000 passengers purchased the card in 2015. EasyJet disclosed membership sales increased by 23% for 2016 (422,000 members). Accordingly, the estimate was revised and generates £71.7 million for 2016. Effective 01 April 2017, the subscription price increases to £199.  Payment fees: Payment by credit card was assessed a 1% or 2% fee during 2016 versus no fee for debit card payment. The majority of consumers pay with a credit card. IdeaWorksCompany believes about 2/3 pay by credit card and incur the fee. EasyJet cut the fee to 1% from 2% about midway during 2016. IdeaWorksCompany assumed 1.5% represents the average, which would generate annual revenue of £46.2 million (2/3 of consumers).  Bundled Fares: the carrier offers Standard (Y), Inclusive (B), and Flexi (W) fares. Of these, the Inclusive fare is not available at the carrier’s website and is only offered through GDS.  The Standard fare is seat only with fees assigned for

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additional services.  The Flexi fare is bundled with: − Checked bag (up to 20kg), seat selection (up front seat or discounted extra leg room), speedy boarding, fast track security, larger cabin bag, and no payment fees (which all qualify as a la carte services). − Unlimited date changes and even the ability to change the route. Flexi is the highest-priced fare. The value of the a la carte items might range from £23 to £57 (assumes midpoint of £40). This is based upon fee ranges of £8 to £17 for seating, £13 to £35 for a checked bag, and £2 to £5 for the payment fee. The booking flexibility component very likely has a higher value and justifies the significant Flexi fare premium above Standard.  The Inclusive fare is bundled with: − Checked bag (up to 20kg). − Assigned seating (excluding front and extra leg room seating). − No payment fees. The value of the a la carte items might range from £17 to £45 (assume midpoint of £31). This is based upon ranges of £2 to £7 for assigned seating, £13 to £35 for a checked bag, and £2 to £3 for the payment fee.  The airline introduced these new initiatives during 2016: − “Earlier Flight” is a mobile app-only proposition, targeting customers who may wish to switch flights at short notice on the day of travel. This flexibility is offered to customers for £15. − This year saw the introduction of pre-purchased in- flight vouchers delivered through the customer relationship management program. In-flight revenue grew by more than 30% in the 12 months ended 30 September 2016.  The airline increased business traffic during the year and carried 12.5 million business travelers in 2016 (2015: 12 million). The carrier disclosed flexible business fare sales increased by 14% for 2016. IdeaWorksCompany estimated 3.8 million Flexi fares were sold in 2015. Applying the 14% increase generates a result of 4.3 million Flexi fare sales for 2016.  For 2015 IdeaWorksCompany estimated Inclusive fares (sold only through GDS) represented 2.9 million passengers. IdeaWorksCompany assumed this increased by 6% (to 3.1 million passengers) matching the rate of year-over-year passenger traffic growth.  The following summarizes various ancillary revenue categories and 2016 per passenger estimates for easyJet: – £82 million from non-seat revenue.

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– £482.5 million from checked bags (2015 rate of £6.60 per passenger). – £70 million allocated seating. – £71.7 million from easyJet Plus memberships. – £46.2 million from credit card fees. – £172 million from the a la carte component assigned to Flexi fare sales (4.3 million passengers x £40). – £96.1 million from the a la carte component assigned to Inclusive fare sales (3.1 million passengers x £31). The above generates total ancillary revenue of £1,020,500,000 for 2016.  The estimate was provided to easyJet management prior to publication of this report. The company did not confirm or deny the accuracy of the estimate.  Revenue for the fiscal year ended 30 September 2016 was £4,669,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, medical assistance, paid seats, sports equipment Sabre Baggage, medical assistance, paid seats Travelport Baggage, paid seats, sports equipment

Eurowings Source and Type Multiple ancillary revenue activities Ancillary Revenue $229,101,083 As a % of Revenue 10.0% Dollars per Passenger $12.43 Financial Period Calendar year 2016 Total Revenue $2,294,586,379 Passengers 18,430,000 Information Source Expert Session Eurowings dated 10 June 2016, Analyst and Investor Conference Call FY 2016, and Investor Info December 2016 Ancillary Revenue  All figures are in euros. Definitions and Other  Eurowings is a wholly owned subsidiary of Lufthansa Notes from Financial Group. Reports  Eurowings disclosed ancillary revenue per passenger is approximately €11 on short-haul routes and €19 on long- haul routes. Using the assumption described below for passenger distribution, the weighted average ancillary revenue is €10.78 (short-haul) + €0.38 (long-haul) = €11.16 average for network passengers. When multiplied

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by passenger traffic of 18.43 million, this generates a 2016 ancillary revenue result of €205,679,000.  During 2016, 18.43 million seats were occupied at a 79% load factor, which reveals 23.33 million seats were offered.  An analysis of the carrier’s schedule for the period of October 2015 – September 2016 reveals approximately 2% of available seats are operated on long haul routes (2,500+ miles). Eurowings during 2016 was largely an intra-Europe airline with a relatively small long haul network. For example, the airline operates up to 10 daily Cologne – Berlin flights, and domestic flights within Germany account for 30% of seat capacity. About 25% of its passengers travel for business purposes.  Eurowings uses a branded fares strategy with 55% of customers buying the Basic fare, 40% buying the Smart fare, and 5% booking the Best fare.  As of June 2016, the carrier anticipated adding the following ancillary revenue options: – Protect your price (fare lock). – Bundled fares optimized by market type. – Bid for a branded fare upgrade. – Eurowings Holidays. – Private seat (empty adjoining seat).  During 2016, 76% of passengers did not accrue frequent flyer miles, while 24% did accrue in Miles & More or Eurowing’s Boomerang Club. Of the 24%, the vast majority (77%) opted for Miles & More.  The estimate was provided to Eurowings management prior to publication of this report. The company did not confirm or deny the accuracy of the estimate.  Eurowings passenger airline revenue for 2016 was: €2,060,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Finnair Source and Type Multiple ancillary revenue activities Ancillary Revenue $139,791,549 As a % of Revenue 5.4% Dollars per Passenger $12.86 Financial Period Calendar year 2016

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Total Revenue $2,580,629,963 Passengers 10,867,000 Information Source Annual Report 2016 Ancillary Revenue  All figures are in euros. Definitions and Other  Ancillary and retail business is the fastest growing revenue Notes from Financial line and the growth is expected to continue as Finnair Reports aims to increase ancillary sales per passenger by 46% (from €10.2 to €14.9) by 2018.  Key performance indicators for 2016 related to ancillary revenue: - Ancillary and retail revenue per passenger up 15.2%. - Ancillary revenue sales through digital touch points up 31%.  Finnair’s total ancillary revenue for 2016 was €125,500,000. Growth was particularly strong in advance seat reservations as well as additional baggage fees.  The carrier generates ancillary revenue from these activities: - Extra baggage fees. - Advance seat selection. - Upgrade options. - Economy comfort product in long-haul. - Sky Bistro in short-haul economy.  Finnair revenue for 2016: €2,316,800,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Animal transport, baggage, bundled fares, meals, medical assistance, paid seats, sports equipment Sabre Baggage, paid seats Travelport Baggage, meals, paid seats, unaccompanied minor

Icelandair Group Source and Type Tour and sightseeing revenue sold to passengers Ancillary Revenue $104,892,000 As a % of Revenue 8.2% Dollars per Passenger $26.22 Financial Period Calendar year 2016 Total Revenue $1,285,574,000 Passengers 4,000,000 Information Source Icelandair Group Annual Report 2016 Ancillary Revenue  All figures below are in US dollars.

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Definitions and Other  More than any other international airline, the tourism Notes from Financial revenue generated by Icelandair is clearly linked to its Reports operations in its home market. The airline effectively serves as a funnel to bring travelers to Iceland. Being an island nation ensures almost all tourists are also customers of the airline.  Icelandair Group operates a Tourism Services business segment which includes a wide range of hotel brands and a full-service tour operator in the country. The airline did not disclose ancillary revenue produced by a la carte and frequent flyer activity.  During 2016, Tourism Services generated segment revenue of $175,342,000 with tourism expenses of $70,450,000. The gross profit of $104,892,000 (segment revenue less tourism expenses) represents the Group’s disclosed ancillary revenue activity. As Icelandair Group is the operator of these services (and not merely earning a commission from a vendor) the gross profit amount may apply as ancillary revenue.  Nearly 1.8 million tourists visited Iceland in 2016, which corresponds to more than five times the country’s population and represents a 39% increase from the preceding year. The heightened interest in Iceland is reflected in increased revenue for Icelandair Group, especially in sales in its hotels and airport retail locations.  This data was provided to Icelandair management prior to publication of this report. The airline did comment that the results reflect the operations of the Icelandair Group and not the airline itself.  Total Group 2016 operating revenue was $1,285,574,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, sports equipment Sabre Animal transport, baggage, meals, medical assistance, unaccompanied minor Travelport Baggage, meals, sports equipment, unaccompanied minor

Jet2.com Source and Type Multiple ancillary revenue activities Ancillary Revenue $257,761,744 As a % of Revenue 26.0% Dollars per Passenger $42.46 Financial Period 12-month period ended 31 March 2016

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Total Revenue $992,116,730 Passengers 6,070,000 Information Source Dart Group Plc. Annual Report & Accounts 2016 Ancillary Revenue  All figures below are in Great Britain pounds (£). Definitions and Other  Jet2.com is a UK-based airline owned by the Dart Group Notes from Financial Plc. The company now reports airline and holiday package Reports operations under a single leisure travel category. However, some information about airline operations continues to be provided.  Non-ticket retail revenue per passenger increased by 3% to £31.98 (2015: £30.91) or ancillary revenue of £194,118,600. This revenue stream is optimized through pre-departure sales (principally checked bags and advanced seat assignment) and in-flight sales (pre-ordered meals, drinks, snacks, cosmetics and perfumes) and ancillary products (car hire and travel insurance).  Passengers carried: - Flight only passenger segments: 3.63 million. - Package passenger segments: 2.44 million. - Total passenger segments: 6.07 million.  Operating revenue disclosed for the airline (ticket plus non-ticket revenue): - Net ticket yield per passenger sector (excl. taxes) £91.11 - Non-ticket revenue per passenger was £31.98. - Total operating revenue per passenger was £123.09, or £747,156,300 for the fiscal period.  These results were provided to Jet2.com management prior to publication of this report. The company did not confirm or deny the accuracy of the results.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport Baggage, meals, paid seats, sports equipment

Lufthansa Network Source and Type Multiple ancillary revenue activities Ancillary Revenue $1,349,812,715 (estimate based upon disclosure of past performance) As a % of Revenue 5.5% Dollars per Passenger $14.71 Financial Period Calendar year 2016

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Total Revenue $24,542,049,363 Passengers 91,775,000 (excluding Eurowings) Information Source Lufthansa Group Annual Report 2016, Investor Info December 2016 (traffic), “Airlines setzen auf Zusatzgebühren” article in 20 Minuten dated 07 April 2014, and Lufthansa Group Conference & Roadshow Presentation March/April 2016 Ancillary Revenue  All figures are in euros. Definitions and Other  Lufthansa Network airlines include Lufthansa passenger Notes from Financial airlines (Lufthansa brand and regional airlines CityLine and Reports Air Dolomiti), SWISS, and Austrian.  Results for Eurowings (the Group’s global low cost carrier) are listed separately in this Yearbook.  The ancillary revenue listed for Lufthansa Group is based upon a disclosure made by a press spokesperson for SWISS airlines in the 20 Minuten article referenced above. In the article, the representative states European airlines move in a bandwidth of 3 to 8 percent of sales being related to ancillary revenue. SWISS was disclosed as being within this range.  Logic would suggest Lufthansa − as a component of the group − is in the same “3 to 8 percent” range. Calculations made by IdeaWorksCompany for 2013 placed ancillary revenue at 3.9% of traffic revenue. The rate was modestly increased to 4% for 2014. The rate was increased to 5.5% for 2015 in recognition of various ancillary revenue initiatives (including the DCC – see below) deployed by Lufthansa Group during 2015. This includes branded fares and the 5.5% rate was continued for 2016.  The airline is developing the following distribution and personalization activities to deliver ancillary revenue of €300+ million more per year through 2018 (Roadshow Presentation March/April 2016): - Introduction of new modular fare concept (unbundling of fares to better allow for individual customer requirements). - New uniform website. - New revenue management system (real-time dynamic pricing beyond the 26 booking classes). - Personalized value offer by using customer data (such as mobile lounge shopping, digital inflight shopping with delivery to gate).  According to the “Eine Punktlandung?” article published in W&V (News from Marketing, Advertising, and Media) in 2015, the Miles & More program has approximately 28 million members worldwide, with about 10% active in the program. Eight million members reside in Germany. The

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program generated revenue of €700 million for 2013.  Lufthansa Group introduced a new branded pricing concept for flights in Europe for Lufthansa, SWISS and Austrian. The new Economy Class fare categories “Light,” “Classic” and “Flex” were introduced to European routes on 01 October 2015 and comprise packages of options and services at different prices.  Ancillary revenue activity for 2016 is estimated to be €1,211,815,000 for Lufthansa/SWISS/Austrian (5.5% x €22,033,000,000).  Lufthansa Network airlines revenue for 2016 was: €22,033,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Austrian, Lufthansa: Baggage, bundled fares, medical assistance, paid seats, unaccompanied minor. Swiss: Baggage, bundled fares, paid seats. Sabre Austrian, Lufthansa: Baggage, bundled fares, medical assistance, paid seats, unaccompanied minor. Swiss: Baggage, bundled fares, paid seats. Travelport Baggage, medical assistance, paid seats, unaccompanied minor

Norwegian Source and Type Multiple ancillary revenue activities Ancillary Revenue $496,360,042 As a % of Revenue 15.9% Dollars per Passenger $16.94 Financial Period Calendar year 2016 Total Revenue $3,125,317,213 Passengers 29,300,000 Information Source Norwegian Air Shuttle Annual Report 2016 Ancillary Revenue  All figures below are in Norway kroner (NOK). Definitions and Other  Results for Norwegian Air Shuttle ASA (the group) consist Notes from Financial of Norwegian Air Shuttle ASA and its subsidiaries. Reports  Ancillary revenue disclosed for 2016 was NOK 3,928,978,000 which is 20% above 2015 results.  The parent company owns 20% of the shares in the online bank, Bank Norwegian AS, through the associated company Norwegian Finans Holding ASA. The airline’s loyalty program, Norwegian Rewards, with its more than 3 million members, is run in cooperation with the bank. The bank issues the Bank Norwegian Visa card which accrues

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points in the carrier’s frequent flyer program. IdeaWorksCompany does not believe this activity is included in the company’s ancillary revenue disclosure. The bank paid commissions to the airline for activity and brand licensing associated with the Visa credit card for 2016: NOK 208,978,000.  Adding commissions from the bank to the disclosed ancillary revenue brings total ancillary revenue to NOK 4,137,956,000.  The group operates the Norwegian Rewards customer loyalty program. Members earn CashPoints for the following activities: - Bank Norwegian co-branded credit cardholders earn 1% for all purchases. Using the card to purchase a low fare accrues a 5% point bonus, and full flex fare purchases accrue 20% point bonus. However, within Norway and Sweden this bonus is 2% and for low fare tickets and 20% for flex tickets. - Non credit cardholders accrue 2% on low fare tickets and 20% on flex tickets. - The airline also operates a Corporate Reward program which provides 4% on low fares and 12% on flex tickets. - Members earn CashPoints with selected merchant partners in the Norwegian Reward program.  Norwegian defines ancillary revenue as “ticket-related products and services” such as revenue from baggage sales and seating. Reviewing a graph associated with its annual results suggests revenue from product bundles represents approximately 50% of the ancillary revenue total.  “Other revenue” consists of sales that are not directly related to an airline ticket, such as cargo and sales of third party products such as onboard Wifi.  Total revenue was NOK 26,054,525,000 for 2016.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Sports equipment Sabre None Travelport None

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Pegasus Source and Type Multiple ancillary revenue activities Ancillary Revenue $282,067,210 As a % of Revenue 22.0% Dollars per Passenger $11.70 Financial Period Calendar year 2016 Total Revenue $1,280,643,855 Passengers 24,100,000 Information Source Pegasus Hava Tasimacilig A.S. Annual Report 2016 and Consolidated Financial Statements for the period of January 1 – December 31, 2016 Ancillary Revenue  All figures are in Turkish lira (TRY). Definitions and Other  Ancillary revenue disclosed by Pegasus was TRY Notes from Financial 816,586,154 for 2016. Reports  Pegasus offers a number of services ancillary to the core air passenger services and generates revenue through the provision of these services, including: - Pre-order and inflight sales of beverages and food. - Sales of duty-free items on international flights. - Excess baggage. - Reservation change and cancellation fees (not considered ancillary revenue by IdeaWorksCompany). - Airport check-in. - Assigned seating fees.  The carrier introduced bundled fares December 2013.  Total revenue from Pegasus operations was TRY 3,707,471,135 for 2016.  All figures include scheduled and charter operations for the airline.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, meals, paid seats Sabre Baggage, meals Travelport Baggage, meals, paid seats

Ryanair Source and Type Multiple ancillary revenue activities Ancillary Revenue $1,982,255,301 As a % of Revenue 26.8% Dollars per Passenger $16.52

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Financial Period Fiscal year ended 31 March 2017 Total Revenue $7,404,830,743 Passengers 120,000,000 Information Source Ryanair Results for Ryanair Holdings Plc. for the period ended 31 March 2017 and Fiscal Year 2017 Ryanair Holdings PLC Earnings Video Presentations Ancillary Revenue  All figures are in euros. Definitions and Other  Regarding ancillary revenue, Kenny Jacobs (CMO Ryanair) Notes from Financial offered these observations during a Routes 27 April 2016 Reports interview: “Ancillary revenue has gone from 20% of revenues to 30% of revenue in a five year time frame.”  Ryanair’s ancillary revenue comprises revenue from non- flight scheduled operations, inflight sales and internet- related services: - Non-flight scheduled operations, including revenue from excess baggage charges, debit and credit card transactions, sales of rail and bus tickets, accommodations, and travel insurance. - Inflight sales such as drinks, food, and merchandise. - Internet-related services, primarily commissions received from products sold on Ryanair.com or linked websites.  For fiscal year 2017, ancillary revenue was €1,779,600,000 and was 13% higher than FY2016. The better results were led by solid performance from onboard sales, reserved seating, speedy boarding, and car hire and offset by reduced travel insurance sales and hotel bookings. The company seeks high load factors (rather than to maximize revenue per ASM) because it boosts the opportunity for ancillary revenue from more passengers. Ancillary revenue for FY2018 is expected to be flat.  Regarding their distribution plans, Kenny Jacobs offered these observations during a Routes 27 April 2016 interview: - 20 million customers in Europe use the mobile app. - “Some of our most frequent customers, who are high purchasers of ancillary products, they never come to the website anymore. They just browse, board and book using a mobile device.” - “I’d like to come onto the Ryanair website at some point this year, and browse JFK to Cancun. You won’t be traveling with Ryanair, but it’s Ryanair becoming a destination website, where you can say I can book flights even outside the European continent, I can book flights from Bergamo to JFK with a stopover in London, and do the Dublin to JFK with Aer Lingus.” These

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Ryanair connections would be done as a direct connection. - “We are going to be feeding traffic to other airlines, so you will be able to book later this year, that specific Bergamo to JFK example with a stopover in Rome Fiumicino or in Dublin.” - Ryanair.com will also allow customers to book campsites, ferry trips, and other travel related items. - “Over 95% of the traffic to our website comes direct. . . You want to own the customer and you don’t want to be paying anybody for traffic to your website.” - Digital has, “on average put 20 extra people on every single Ryanair flight in a 3 year period, which is pure profit.”  Membership of “MyRyanair” (online customer profiles) grew to 20 million members by year end and is expected to rise to 30 million by March 2018. The mobile application had 21 million downloads during FY2017.  Ryanair FY2017 revenue was €6,647,800,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, medical assistance, musical instruments, paid seats, priority boarding, sports equipment Sabre Animal transport, baggage, medical assistance, paid seats, travel services Travelport Baggage, baby/infant equipment, paid seats, musical instruments, sports equipment

SAS Scandinavian Source and Type Onboard retail including food and merchandise Ancillary Revenue $29,867,312 As a % of Revenue 0.6% Dollars per Passenger $1.03 Financial Period For the fiscal period ending 31 October 2016 Total Revenue $4,676,723,280 Passengers 29,009,000 (includes charter operations) Information Source SAS Annual Report, November 2015 – October 2016 Ancillary Revenue  All figures below are in Swedish kroner (SEK). Definitions and Other  Inflight sales during 2016 were SEK 252,000,000 and Notes from Financial represents the only ancillary disclosure made by the Reports airline. Other references to a la carte revenue were made, however these were combined with non-qualifying

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activity such as ground handling services, maintenance for hire, and name change fees.  During 2016 the airline equipped cabin crew with iPad Minis which helped make retail transactions more efficient. SAS has decided to install what it calls the “market’s fastest Wifi” on its short and medium haul fleet. Wifi is already available on most of the long haul fleet, and is offered to low fare customers for a fee.  Over the spring and summer of 2016, SAS increased the range of options for its customers by launching SAS Go Light, which is a pared-down service option adapted to European market trends. SAS Go Light strengthens the carrier’s competitiveness in terms of price comparisons on various search engines. From May 2016 through October 2016, nearly 1.3 million passengers were Go Light travelers.  The Eurobonus frequent flyer program has 4.7 million members.  Total Group 2016 operating revenue was SEK 39,459,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Animal transport, baggage, bundled fares, meals, paid seats Sabre Animal transport, baggage, bundled fares, meals, paid seats Travelport Animal transport, baggage, meals, paid seats

Virgin Atlantic Source and Type Primarily partner activities associated with the FFP Ancillary Revenue $229,684,101 As a % of Revenue 6.4% Dollars per Passenger $42.25 Financial Period Calendar year 2016 Total Revenue $3,571,802,570 Passengers 5,436,000 Information Source Virgin Atlantic Annual Report for 2016 and 2014/2015 UK Airline Financial Data – UK CAA Ancillary Revenue  Figures are in Great Britain pounds (£). Definitions and Other  Virgin Atlantic disclosed ancillary revenue activity Notes from Financial representing £31.82 per passenger to the UK Civil Reports Aviation Authority for 2014 (the most recent disclosure): - Baggage revenue: £11,966,000 (£1.94 per passenger based upon 6,156,000 passengers in 2014).

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- Incidental revenue: £183,945,000 (£29.88 per passenger based upon 6,156,000 passengers in 2014). This activity is described as “net revenues (i.e. gross revenues less related direct expenses) from such sources as surface transport, food services, bar and duty free sales, property and other incidental net operating revenues which accrued to the airline from sources other than air transport.” The description nicely aligns with that used for ancillary revenue. However, it does not include excess baggage revenue. Applying the £31.82 per passenger (from 2014) rate to 2016 traffic generates a 2016 ancillary revenue estimate of £172,973,520.  Ancillary revenue activities at Virgin Atlantic consist of: - Sale of miles to frequent flyer program partners (very likely the major component of the carrier’s ancillary revenue). - Excess baggage charges. - Pre-assigned seating. - Extra leg room seating. - Issuance of a paper ticket (£25).  Turnover for 2016 was £2,689,900,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Wizz Air Source and Type Multiple ancillary revenue activities Ancillary Revenue $664,284,984 As a % of Revenue 39.4% Dollars per Passenger $30.43 Financial Period 12 month period ended 30 September 2016 (Fiscal year ends 31 March) Total Revenue $1,686,336,085 Passengers 21,829,795 Information Source Full Year F16 Results Presentation, Fiscal Year 2017 Quarter 1 Results, First Half Fiscal Year 2017 Results, and September 2016 Traffic Statistics Ancillary Revenue  All figures are in euros.

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Definitions and Other  Wizz Air's unbundled pricing model offers customers a Notes from Financial selection of add-on options while driving ancillary revenue Reports from these activities: - Airport check-in (avoided by printing boarding pass prior to arrival at airport). - Airport transfers and airport parking. - Wizz Plus branded fare. - Assigned seating. - Buy on board food and beverage. - Call center bookings. - Car rentals, hotel accommodations, and trip insurance. - Checked baggage. - Confirmation by SMS message service. - Extra leg room seating. - Fast track security (Budapest). - Large carry-on baggage. - On time arrival guarantee. - Paid lounge access (Budapest and Katowice). - Priority boarding. - Wizz co-branded credit card (Hungary, Romania, and Poland). - Wizz Discount Club (€29.99 standard fee). - Wizz Flex (ability to make reservation changes and pay only fare difference). - Wizz Privilege Pass (subscription program offering flight-related benefits).  Ancillary revenue by reporting period: - Fiscal Quarter 3, 2016: €123,410,000. - Fiscal Quarter 4, 2016: €118,962,000. - Fiscal Quarter 1, 2017: €152,900,000. - Fiscal Quarter 2, 2017: €201,100,000. Year period ended 30 September 2016: €596,372,000.  For fiscal year 2016, bag revenue averaged €11.50 per passenger, and the Wizz Discount Club had 815,000 members (up 41% from fiscal year 2015). Assigned seating was rolled out network wide on 19 May 2015. During fiscal year 2017, bag revenue averaged €11.40 per passenger and the Wizz Discount Club had 1,024,000 members.  The airline recently published a graphic labeled “13 Years of Great Expansion and Remarkable Achievements,” which included the following statistics: - 134,868,451 passengers were flown. - 10,548,710 chocolate bars were purchased (a take rate of about 8%). - 8.9 million cups of coffee were served (a take rate of about 7%).  Passengers carried for the period ended 30 September 2016: 21,829,795.

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 Revenue by reporting period: - Fiscal Quarter 3, 2016: €310,474,000. - Fiscal Quarter 4, 2016: €282,260,000. - Fiscal Quarter 1, 2017: €364,900,000. - Fiscal Quarter 2, 2017: €556,300,000. Total of the above: €1,513,934,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

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Non-Reporting Carriers for Europe and Russia The following airlines did not reveal ancillary revenue activity for the most recent full year period:

Adria Airways (2013 available during research time), Air Europa-Globalia (2015 available during research time,) Air Malta (2015 available during research time), Aegean Airlines, Air Serbia, Alitalia, Atlantic Airways (no disclosure since 2014), Austrian (included in results from Lufthansa Network), Brussels Airlines (does not issue reports separate from Lufthansa Group), Croatia Airlines (2015 available during research time), Czech Airlines, Flybe, Iberia Airways (subsidiary of International Airlines Group), LOT Polish, Luxair, Meridiana Fly, (only 2012 available during research time), Monarch Airlines, Nordwind Airlines, S7 Airlines (Russian only), SATA International (2015 available during research time - only in Spanish), SmartWings (2015 report from Travel Service available during research time), SWISS (included in results from Lufthansa Network), TAP Portugal, Thomas Cook Group (includes Condor), TUI Group (airline brands: Arkefly, Corsair, Jetairfly, Thomson Airways, TUIfly, and TUIfly Nordic), Turkish Airlines, UTair, Vueling, and Wideroe (no disclosure since 2014).

Carriers are invited to contact IdeaWorksCompany directly to provide feedback on the statistics provided in this report. Airlines also may directly disclose their ancillary revenue activities to IdeaWorksCompany for inclusion in next year’s report. Please send your comments to Jay “at” IdeaWorksCompany.com.

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The Americas

Aeromexico Source and Type Multiple ancillary revenue activities Ancillary Revenue $175,736,471 As a % of Revenue 6.0% Dollars per Passenger $8.92 Financial Period Calendar year 2016 Total Revenue $2,932,755,446 Passengers 19,703,000 Information Source 4th Quarter Report of 2016 and Aeromexico Investor Presentation for September 2016 Ancillary Revenue  All figures below are in Mexican pesos (MXP) unless Definitions and Other otherwise noted. Notes from Financial  Ancillary revenue was MXP 164 (US$8.92) per passenger Reports through the 3rd quarter of 2016. For 2015 it was MXP 119 and for 2014 was MXP 1002. Applying the 2016 rate to full-year passenger traffic yields total ancillary revenue of MXP 3,231,292,000 for 2016.  The airline describes the following ancillary revenue activities: − Aeromexico Plus preferred seating in the first rows of the cabin and the exit rows. − Excess checked baggage. − Concierge services. − Ground transportation. − Sale of discount passes. − Preferred seating. − Cross Border Express (Tijuana-San Diego) offers a walking option from San Diego to the Tijuana Airport for $16. Upgrades were also listed, which is not included in the ancillary revenue definition used for this report. However, information about this activity was not separately disclosed and the revenue was not removed from the ancillary revenue total for Aeromexico.  Club Premier is the frequent flyer program associated with Aeromexico. The airline owns 51% of the program with Aimia (Canada) as a co-owner. The program has 3.8 million members and had gross billings of CAD 241 million for 2016 (up 10% from 2015 according to 4th quarter 2016 results conference call). A portion of this activity is assumed to be included in the ancillary revenue disclosure described above.  Club Premier introduced a new Santander cobranded

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credit card and renewed the American Express cobranded card relationship.  Revenue for 2016 was 53,925,000,000 Mexican pesos.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, meals, paid seats, sports equipment, unaccompanied minor Sabre Animal transport, baggage, bundled fares, inflight entertainment, paid seats, unaccompanied minor Travelport Baggage, paid seats, sports equipment, unaccompanied minor

Air Canada Source and Type Multiple ancillary revenue activities Ancillary Revenue $1,179,131,138 As a % of Revenue 10.4% Dollars per Passenger $26.29 Financial Period Calendar year 2016 Total Revenue $11,377,610,400 Passengers 44,849,000 Information Source Air Canada 2016 Annual Report and Aimia Audited Consolidated Financial Statements for the year ended 31 December 2016 Ancillary Revenue  All figures below are in Canadian dollars (CAD). Definitions and Other  Air Canada made a disclosure for 2016 that meets the Notes from Financial definition for ancillary revenue: “Other operating Reports revenues are principally derived from customers located in Canada and consist primarily of revenues from the sale of the ground portion of vacation packages, buy on board and related passenger ancillary services and charges, and other airline-related services.” Other revenue for 2016 was CAD 832,000,000 (this does not include a frequent flyer component).  For 2017 Air Canada aims to increase its ancillary revenue per passenger through branded fares, and other a la carte services, such as those related to baggage, ticket changes, seat selection, preferred seating and upgrades. Air Canada is also generating revenues from its onboard offerings, including food, beverage, duty-free shopping and onboard Wifi.  Aeroplan is the frequent flyer program associated with Air Canada. The program is owned and operated by Aimia, which is a public corporation. Air Canada, plus other Star

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Alliance partners, is Aimia’s largest redemption partner. For the year ended 31 December 2016, Aimia spent 47% of its “rewards and direct costs” with Air Canada, in connection with rewards purchased from Air Canada and other airlines (Star Alliance partners). The tickets purchased by Aimia are recorded as passenger revenue and do not fall under the other operating revenue category described above. IdeaWorksCompany calculated the 47% share to equal CAD 689,067,000 (47% x CAD 1,466,100,000).  Air travel remains the most popular reward among members, representing 73% of all rewards claimed by Aeroplan members in 2016. During 2016, the airline purchased $247 million of Aeroplan miles from Aimia.  Ancillary revenue for Air Canada is estimated to equal CAD 1,521,067,000 for 2016 and is composed of other operating revenue and the sale of reward tickets to Aeroplan/Aimia.  Air Canada operating revenue for 2016 was CAD 14,677,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares, paid seats Sabre Bundled fares, paid seats Travelport Paid seats

Alaska Air Group Source and Type Multiple ancillary revenue activities Ancillary Revenue $1,063,900,000 As a % of Revenue 17.9% Dollars per Passenger $31.41 Financial Period Calendar year 2016 Total Revenue $5,931,000,000 Passengers 33,872,000 (Combined total of Alaska Airlines mainline and Horizon Air) Information Source 2016 Annual Report on Form 10-K, Q4 2016 Alaska Air Group Earnings Call, and 2016 year in review: Mileage Plan by the numbers (07 February 2017 website posting) Ancillary Revenue  All figures below are in US dollars. Definitions and Other  Alaska Air Group operates Alaska, Virgin America and Notes from Financial Horizon Air. The Group completed the acquisition of

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Reports Virgin America on 14 December 2016, at which time Virgin America became a wholly-owned subsidiary. Results for Virgin America (14-31 December 2016) may be included in some of the data presented.  Other revenue consists of freight and mail, certain frequent flyer and ancillary revenue. While some of Alaska’s product features are included in base pricing, the carrier has unbundled certain ancillary features. Major ancillary revenue products include checked bag fees, change fees and lounge memberships. Alaska also promotes and sells products in-flight to enhance the guest experience, including Tom Douglas signature meals, snacks, alcoholic beverages, in-flight entertainment and Wi-Fi. Total other revenue, excluding frequent flyer program revenue, represents about 7% ($415 million) of total revenues. From this, cargo revenue of $73.1 million was deducted to approximate the definition of ancillary revenue (based upon 2016 DOT Schedule P-1.2 filings) to yield a net value of $341.9 million.  Mileage Plan revenues represent approximately 12% of the group's total revenues and during 2016 increased $100 million or 30%, due to increased miles sold and improved compensation terms with the Mileage Plan affinity credit card partner as a result of a contract extension which became effective 01 January 2016. 30% of members have a Mileage Plan credit card (Investor Day 2017). Based upon other disclosures made in the same presentation, IdeaWorksCompany estimates Mileage Plan membership is 4.5 million.  Per disclosure made in the 4th quarter 2016 earnings call: Alaska is now selling premium class and both guest feedback and revenue have been fantastic. The airline expects this product to add approximately $50 million or even more to revenues in 2017, and should continue to grow into an $85 million boost by 2018. Total cash flows from Mileage Plan and Elevate (Virgin America) exceeded $900 million for 2016.  Alaska Mileage Plan also disclosed 16,106,071 paid trips were taken by its members during 2016, which represents 47.5% of all passenger traffic.  IdeaWorksCompany estimates Alaska’s 2016 ancillary revenue was $1,063,900,000 based upon revenue from these sources: - Other revenue of $341.9 million (reflects the calculation described above). - Mileage Plan co-branded revenue: $722 million.  Operating revenue for 2016 was $5,931,000,000 for the Group.

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A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Allegiant Source and Type Multiple ancillary revenue activities Ancillary Revenue $544,482,000 As a % of Revenue 40.0% Dollars per Passenger $48.93 Financial Period Calendar year 2016 Total Revenue $1,362,831,000 Passengers 11,128,191 Information Source Annual Report Form 10-K for the year ended 31 December 2016 Ancillary Revenue  All figures below are in US dollars. Definitions and Other  Allegiant provides unbundled air-related services and Notes from Financial products (ancillary revenue) in conjunction with air Reports transportation for an additional cost to customers: - Optional air-related services and products include a customer convenience fee, baggage fees, advance seat assignments, proprietary travel protection product, change fees, use of the call center for purchases, priority boarding, food and beverage purchases on board, and other air-related services. - Third party ancillary products and services such as hotel rooms, ground transportation (rental cars and hotel shuttle products) and attractions (show and tour tickets) for sale to passengers.  Allegiant describes “its unique business model” in the annual report. The elements of this model are the following: - Focus on leisure travelers. - Provide low frequency service from small and medium- sized cities. - Use larger jet aircraft to provide nonstop service from under-served cities direct to leisure destinations. - Unbundled pricing of air-related services and products. - Sell only directly to travelers. - No connecting flights offered. - Do not use code-share arrangements.  Additional details are provided regarding Allegiant’s ancillary revenue approach which represents a type of

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manifesto for the airline: “We believe most leisure travelers are concerned primarily with purchasing air travel for the least expensive price. As such, we have unbundled the air transportation product by charging fees for services many U.S. airlines have historically bundled in their product offering. This pricing structure allows us to target travelers who are most concerned with low fare travel while also allowing travelers to customize their experience with us by purchasing only the additional conveniences they value. For example, we do not offer complimentary advance seat assignments; however, customers who value this product can purchase advance seat assignments for a small incremental cost. In addition, snacks and beverages are sold individually on the aircraft, allowing passengers to purchase only items they value.”  Allegiant has an exclusive agreement with Enterprise Holdings Inc. for rental car bookings packaged with air travel, which accounted for more than 50% of the carrier’s third party products ancillary revenue in 2016.  Ancillary revenue is recognized net of amounts paid to wholesale providers, travel agent commissions and payment processing fees.  Allegiant has said it was the first airline to offer ancillary services in the US, by pioneering this approach in 2003 and 2004 when it began selling seat assignments and charging for bags.  Allegiant does not sell through Expedia, Travelocity, Orbitz or any other online travel agencies, nor are its flights displayed and sold through the global distribution systems which include Sabre, Galileo, Worldspan and Amadeus. This distribution strategy results in reduced expenses by avoiding the fees associated with the use of GDS distribution points and permits the airline to closely manage ancillary product offerings and pricing while developing and maintaining a direct relationship with consumers. 94.2% of scheduled service revenue was purchased directly through the website in 2016.  Ancillary revenue increased to $544,482,000 for 2016, up from $474 million in 2015.  The following was disclosed for the carrier’s commission based activity for 2016 (includes hotel and car rental): - Gross revenue, 3rd party: $144,608,000. - Cost of goods sold: ($98,552,000). - Transaction costs: ($1,116,000) includes agency commissions and payment expenses. - Ancillary revenue, 3rd party: $44,940,000.  Package sale details from 2016: - Hotel room nights sold: 439,942 (2015: 452,272). - Car rental days sold: 1,502,326 (2015: 1,204,982).

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Hotel room night sales have slowed in the current year mostly due to Allegiant growing its East Coast network (where hotel room night sales are weaker) because route opportunities have become limited at its largest hotel market, which is Las Vegas. Per passenger revenue statistics (scheduled services) for 2016: - Air fare, scheduled service: $68.47. - Ancillary revenue, air related: $45.40. - Ancillary revenue, third party: $4.08. - Average fare total: $117.95. The annual passenger statistic of 11,128,191 includes scheduled and non-scheduled operations and is used to calculate the per passenger averages used in this report.  Operating revenue for 2016 was $1,362,831,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

American Source and Type Multiple ancillary revenue activities Ancillary Revenue $4,901,000,000 As a % of Revenue 12.2% Dollars per Passenger $24.66 Financial Period Calendar year 2016 Total Revenue $40,180,000,000 Passengers 198,714,575 Information Source Form 10-K Annual Report of American Airlines Group for 2016, the transcript of the 4thd quarter 2016 conference call, and December and full year 2016 traffic results Ancillary Revenue  All figures below are in US dollars. Definitions and Other  “Other Revenues” were defined in the 2016 annual report Notes from Financial to primarily include revenue associated with the Reports AAdvantage loyalty program, baggage fees, ticketing change fees, airport clubs and inflight services.  Other revenues for 2016 were $4,901,000,000 and increased $183 million, or 3.9%, in 2016 from 2015 driven by an increase in loyalty program revenue; this amount qualifies as ancillary revenue.  In 2016 and 2015 other revenues associated with the AAdvantage program were $2.1 billion and $1.9 billion,

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respectively, of which $1.9 billion and $1.7 billion, respectively, related to the marketing component of mileage sales and other marketing-related payments. According to oneworld, the AAdvantge program has 100 million members.  The airline stopped reporting mileage accrual activity as of 2016. For 2015 American disclosed approximately 58% of issued miles were sold to program participants and partners.  During 2016, American entered into new co-branded credit card program agreements with Citi and Barclaycard US. The airline disclosed the following new revenue expected from the new agreements: $200 million in the first year, $500 million in the second year and $800 million in the third year.  The number of AAdvantage reward redemptions was 10 million for 2016, which includes travel redemptions for flights and upgrades on American and other air carriers, as well as redemption of car and hotel awards, club memberships and merchandise. Air travel rewards represented approximately 6.3% (2015: 6.5%) of total mainline and regional RPMs during that period.  Operating revenue for 2016 was $40,180,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares Sabre Bundled fares, paid seats Travelport Paid seats

Avianca Source and Type Partner activities associated with the frequent flyer program Ancillary Revenue $154,245,000 As a % of Revenue 3.5% Dollars per Passenger $5.23 Financial Period Calendar year 2016 Total Revenue $4,361,341,000 Passengers 29,479,948 Information Source Avianca Holdings 2016 Management Report Ancillary Revenue  All figures below are in US$. Definitions and Other  Revenue from the LifeMiles frequent flyer program, which Notes from Financial represents Avianca’s sole disclosure of ancillary revenue Reports qualifying activity, was $154,245,000 for 2016. Avianca

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owns 70% of LifeMiles (LifeMiles BV incorporated in Curacao).  During 2016, LifeMiles purchased reward tickets at the rate of USD$0.0079 ($.007 for 2015) per mile for a total expenditure of COP 195,316,000,000.  The LifeMiles program has 7 million members.  Operating revenue for 2016 was $4,361,341,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Animal transport, baggage, bundled fares, paid seats, sports equipment, unaccompanied minor Sabre Animal transport, baggage, bundled fares, paid seats, unaccompanied minor Travelport Animal transport, baggage, paid seats, sports equipment, unaccompanied minor

Azul Source and Type Partner activities associated with the frequent flyer program Ancillary Revenue $218,633,950 As a % of Revenue 10.6% Dollars per Passenger $10.60 Financial Period Calendar year 2016 Total Revenue $2,057,661,374 Passengers 20,619,707 Information Source Azul Prospectus dated 10 April 2017 Ancillary Revenue  All figures below are in Brazilian reais (R$). Definitions and Other  The airline disclosed ancillary revenue in its financial filings, Notes from Financial but the definition includes significant cargo and cabin Reports upgrade activity which does not align with the definition used by IdeaWorksCompany.  The airline wholly owns its TudoAzul loyalty program which has been designated as a strategic revenue- generating asset; the program had approximately 7.0 million members as of December 31, 2016.  Azul sells TudoAzul points to the program’s business partners, including credit card issuers and other companies, as well as directly to TudoAzul members. Gross billings for the sale of points were R$708,700,000 for 2016, with 24.7 billion points sold, which represents a valid ancillary revenue disclosure.  Operating revenue for 2016 was 6,669,891,000.

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A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Delta Source and Type Multiple ancillary revenue activities Ancillary Revenue $5,172,400,000 As a % of Revenue 13.1% Dollars per Passenger $28.15 Financial Period Calendar year 2016 Total Revenue $39,406,000,000 Passengers 183,741,787 Information Source Form 10-K for the year ended 31 December 2016, Delta Air Lines Management Discusses Q2 2016 Results, Investor Day 2016 Presentation, and 04 January 2017 Financial and Traffic Press Release Ancillary Revenue  All figures below are in US dollars. Definitions and Other  Delta generates ancillary revenue with the following Notes from Financial products and services: Reports − Checked bags. − Preferred seats. − Inflight Wifi. − Mileage booster. − Priority boarding. − SkyClub passes. − Ascend Package providing lounge pass and priority boarding. − Economy Comfort+ upgrades. − Hotels, car rentals, and trip insurance.  Glen Hauenstein (president) disclosed the following information about ancillary revenue activities during the 2nd quarter 2016 earnings call: “Comfort+ paid load factor increased by 15 points to 46% as we began selling this product in the purchase path in mid-May. We now expect Comfort+ to generate nearly $300 million of up-sell revenues in the second half of 2016 with further upside in 2017 as we begin the international rollout scheduled to be complete by the end of 2017."  The carrier offers four branded fare products: Delta One/First Class, Delta Comfort+, Main Cabin, and Basic Economy. Those paying to be in Comfort+ represented 43% of occupancy in 2016 with an objective to increase

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this to 50% by 2018 (2016 Investor Day Presentation estimate). The airline is adding a new Premium Select cabin (positioned between economy and business) in limited markets. Branded fare revenue for 2016 was $1.4 billion, and is expected to increase to $2.7 billion by 2019. The carrier expects to offer Basic Economy worldwide by 2018.  Per its 2016 Investor Day presentation, the airline has created the “world’s most valuable co-brand portfolio” with American Express. The relationship contributed revenue of $2.7 billion for 2016; this amount is expected to increase to $3 billion for 2017, and leap to $4 billion by 2021. Credit card enrollments are at record levels this year and will end the year up double digits. The cooperation with American Express includes cobrand card, Membership Rewards, Sky Club, and merchant services. The program has more than 91 million members.  During 2016, program members redeemed more than 326 billion miles in the SkyMiles program for 13.4 million award redemptions (2015: 13.3 million). During this period, 7.9% of revenue miles flown on Delta were from award travel (2015: 7.9%).  Total ancillary revenue for Delta is estimated to be $5,172,400,000 using the following data: − Revenue from baggage fees was $872.4 million for 2016 based upon data available at US DOT Bureau of Transportation Statistics website. − Co-branded revenue from SkyMiles was $2.7 billion. − Branded fare revenue (which includes the contribution of Delta Comfort+) was $1.4 billion. − Miscellaneous activities equaled 0.5% (0.005) of revenue, or $200 million.  Airline operating revenue for 2016 was $39,406,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares, paid seats Sabre Bundled fares Travelport Paid seats

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Frontier Airlines Source and Type Multiple ancillary revenue activities Ancillary Revenue $726,000,000 As a % of Revenue 42.4% Dollars per Passenger $48.60 Financial Period Calendar year 2016 Total Revenue $1,714,000,000 Passengers 14,937,000 Information Source Form S-1 Registration Statement of Frontier Group Holdings, Inc. Dated 31 March 2017 Ancillary Revenue  All figures below are in US dollars. Definitions and Other  On 03 December 2013 Frontier was sold by Republic Notes from Financial Airways to an affiliate of Indigo Partners LLC and Frontier Reports became a privately-held company. On 31 March 2017 the company filed for a public offering of shares.  Non-ticket revenue (ancillary revenue) for 2016 was $726,000,000. Passenger revenue per available seat mile was 5.38 cents, and non-ticket revenue was 3.95 cents per ASM.  Non-ticket revenue consists primarily of revenue generated from air travel-related services such as baggage fees, seat selection fees, itinerary service fees, booking fees and on-board sales. Frontier also includes services not directly related to air transportation such as the advertising, marketing and brand elements resulting from the Early Returns affinity credit card program and revenue associated with the Discount Den membership program. These activities are consistent with the definition of ancillary revenue.  Frontier does sell air travel via GDS and online travel agencies, and endeavors to generate ancillary revenue through these channels.  The airline currently offers a la carte services through both unbundled and bundled service options. In 2015, Frontier introduced The Works, a convenient option that includes guaranteed seat assignment, carry-on and checked baggage, ticket refundability and changes, and priority boarding, for a single price and only available at the website (not GDS). In 2016, the airline expanded its bundled product offering with The Perks, which enables customers to book the same amenities included in The Works, excluding refundability and ticket changes, through GDS channels.  Operating revenue for 2016 was $1,714,000,000.

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A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre Baggage Travelport None

GOL Source and Type Multiple ancillary revenue activities Ancillary Revenue $340,738,250 As a % of Revenue 11.2% Dollars per Passenger $10.44 Financial Period Calendar year 2016 Total Revenue $3,044,062,050 Passengers 32,622,800 Information Source 4Q16 Earnings Release, 2016 Results Presentation, and 2016 GOL and SMILES Public Meeting Presentation (Nov. 2016) Ancillary Revenue  All figures below are in Brazilian reais (R$). Definitions and Other  The company discloses revenue from cargo operations Notes from Financial and ancillary revenue activities as a single result, which Reports equals 12% of total revenue or R$1,196,000,000. For 2016, the airline also separately disclosed 2016 cargo revenue as R$91,500,000. This permitted a calculation to determine 2016 ancillary revenue of R$1,104,500,000.  The following ancillary revenue activities are offered by the airline: - Excess baggage. - Extra seat. - Buy-onboard purchase of food and beverages. - Insurance, care hire, and hotel booking commissions. - GOL+ Conforto extra leg room seating (starting at R$15). These extra leg room seats are now available on 100% of the fleet. - GOL+ Premium seat offers more leg room and with the middle seat blocked. Additional amenities include airport lounge (GRU, SCL, EZE), 50% greater seat recline, blanket and pillow, welcome drink, hot and cold snacks, and wine, dedicated toilet, and 50% mileage bonus.  The SMILES frequent flyer program was incorporated as a separate wholly-owned subsidiary on 21 December 2012. On 26 April 2013 SMILES offered shares through an initial public offering (IPO); the airline currently owns 54.1% of

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SMILES. SMILES revenues for GOL increased to R$449,400,000 from R$349,000,000 in 2015. This amount is included in the ancillary revenue amount. The program has 12 million members in Latin America.  The following was disclosed regarding the carrier’s relationship with the SMILES frequent flyer program for 2016: - Gross billings for SMILES was R$1,616,200,000 (this amount benefits the SMILES subsidiary and is not fully included as 2016 results for GOL). - Mileage redemption on international airline partners was 26.4% of all miles redeemed for the 4th quarter of 2016 (representing 2.9 billion miles). The program had 13 international partners, including Aeromexico, Air France, Copa, Delta, Emirates, Etihad, and Qatar. - Of the miles accumulated in Brazil, SMILES had a 40.9% share for the 3rd quarter of 2016 compared to 59.1% for LATAM/Multiplus.  Operating revenue for 2016 was R$9,867,300,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Hawaiian Airlines Source and Type Multiple ancillary revenue activities Ancillary Revenue $236,498,280 As a % of Revenue 9.7% Dollars per Passenger $21.41 Financial Period Calendar year 2016 Total Revenue $2,450,580,000 Passengers 11,044,000 Information Source Annual Report 2016 for Hawaiian Holdings, Inc., 05 December 2016 Investor Day Presentation and Investor Presentation September 2016 Ancillary Revenue  All figures below are in US dollars. Definitions and Other  Ancillary revenue disclosed by Hawaiian was $23.37 (2015: Notes from Financial $21.91) per passenger for 2016 and consists of: baggage, Reports sale of frequent flyer miles, Extra Comfort seating, and other activities (includes ticket fees, first class upgrades, vacation commissions and on-board sales). Multiplying

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this by passenger traffic generates a result of $258,098,280.  IdeaWorksCompany does not include ticket change fees as ancillary revenue. Data from the US DOT Bureau of Transportation Statistics website lists Hawaiian’s revenue from ticket and change fee as $21.6 million for 2016. Accordingly, this was deducted from the carrier’s ancillary revenue disclosure to generate a 2016 adjusted result of $236,498,280. First class upgrades are not included in the definition, however revenue data for this could not be found; this activity remains in the adjusted result.  Revenue for Extra Comfort and Preferred seating was approximately $50 million during 2016, and is expected to increase by 104% for 2019. Extra Comfort seating has 70+% paid utilization in North America (not free upgrades). This activity is included in the adjusted result.  Regarding the HawaiianMiles frequent flyer program, the number of free travel awards used for travel on Hawaiian was approximately 585,000 in 2016. The amount of free travel awards as a percentage of total revenue passengers was approximately 5%.  The airline disclosed 10+% growth of its co-branded credit card portfolio and a 20+% growth in cardholder spending.  Operating revenue for 2016 was $2,450,580,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

JetBlue Source and Type Multiple ancillary revenue activities Ancillary Revenue $956,575,000 As a % of Revenue 14.4% Dollars per Passenger $25.00 Financial Period Calendar year 2016 Total Revenue $6,632,000,000 Passengers 38,263,000 Information Source Form 10-K for the Year Ended 31 December 2016 and 2016 Investor Day Presentation – Dec. 2016 Ancillary Revenue  All figures below are in US dollars.

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Definitions and Other  JetBlue disclosed ancillary revenue was expected to Notes from Financial exceed $25 per passenger for 2016. When multiplied by Reports 2016 passenger traffic, this equals total ancillary revenue of $956,575,000. This amount is $143,875,000 above the estimate calculated by IdeaWorksCompany for 2015. The airline did not specifically define the activities included as ancillary revenue. The following additional ancillary revenue disclosures were made for 2016: - Even More extra leg room seating remains JetBlue’s largest a la carte product and generated $238 million in 2016. - Fare options (branded fares) contributed $260 million (estimate) of additional revenue for 2016, which is significantly higher than the $100 million amount for 2015. - The co-branded credit card issued by Barclays is expected to provide incremental annual sales of $60 million by 2019 and $80 million by 2022. - Since 2008 the annual ancillary revenue increase has been 6+%. - Ancillary revenue appears (from the information provided on a bar chart) to provide revenue of a penny ($0.01) per ASM. - Revenue from bag fees disclosed to the US DOT for 2016 was $231.6 million (2015: $142.7 million).  In 2016, other revenue increased by $96 million compared to 2015. The increase in other revenue was primarily due to an increase in bag fees partly attributable to the new branded fares structure. Included as other revenue is the marketing component of TrueBlue point sales, on-board product sales, charters, ground handling fees of other airlines and rental income.  There were over 1.6 million TrueBlue one-way redemption awards flown during 2016, representing approximately 4% of the carrier’s total revenue passenger miles.  Operating revenue for 2016 was $6,632,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares Sabre None Travelport None

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LATAM Airlines Source and Type Primarily partner activities associated with the FFP Ancillary Revenue $719,481,000 As a % of Revenue 7.6% Dollars per Passenger $10.74 Financial Period Calendar year 2016 Total Revenue $9,527,088,000 Passengers 66,960,000 Information Source Annual Report 2016 of LATAM Airlines Group and Morgan Stanley 9th Annual Latin America Executive Conference Presentation (January 2017) Ancillary Revenue  All figures below are in US dollars. Definitions and Other  Total ancillary revenue for LAN and TAM Airlines for 2016 Notes from Financial was $719,481,000 and consists of these items: Reports - Duty-free income: $11,141,000. - Tours package revenue: $133,575,000. - Multiplus income (loyalty program): $400,568,000. - Multiplus other income (loyalty program): $174,197,000. The above figures represent income, and if reported as revenue, would be much higher.  The group does report ancillary revenue (also described as “Other Operating Income”) which includes activities such as tours, duty free, inflight sales, aircraft leasing, maintenance, customs and warehousing operations, and other miscellaneous items. For 2016, LATAM generated other revenues of US$364.5 million from these activities. The commingling of cargo revenue and aircraft leasing prevents its inclusion as ancillary revenue.  LATAM indicates it will renew its domestic business model to increase ancillary revenue through these activities: - Buy on board. - First and second bag. - Preferred seating. During 2016 the airline introduced an economy plus product and fees for a second checked bag.  LATAM Pass had 13 million members and LATAM Fidelidade had 13.2 million members at the end of 2016. Members redeemed 2.3 million reward tickets during 2016. Multiplus is a publicly traded company in Brazil, and LATAM Airlines Group owns 73% of the ordinary shares of Multiplus and has 16.5 million members. The company operates TAM’s frequent flyer program.  Total operating revenue for 2016 was $9,527,088,000.

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A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares Sabre Bundled fares Travelport None

Southwest Source and Type Multiple ancillary revenue activities Ancillary Revenue $2,832,800,000 As a % of Revenue 13.9% Dollars per Passenger $18.67 Financial Period Calendar year 2016 Total Revenue $20,425,000,000 Passengers 151,740,357 Information Source 2016 Annual Report and Investor Day June 2016 Presentation Ancillary Revenue  All figures below are in US dollars. Definitions and Other  Southwest lists the following ancillary services in its 2016 Notes from Financial Annual Report: Reports - EarlyBird Check-In which provides a better boarding position. - Transportation of pets and unaccompanied minors. - When available, the airline also sells priority boarding in positions A1-15. - Satellite-based Wifi internet and premium movie service (for a fee) on all of its 737-700 and 737-800 aircraft.  Southwest disclosed its Rapid Rewards program revenue for 2016 was forecasted to be $1.7 billion above 2011 revenue. Back in 2011, the airline reported miscellaneous operating revenue of $855 million to the US DOT for 2011. If $600 million of this amount is assumed to be attributed to Rapid Rewards, this places 2016 forecast Rapid Rewards revenue at $2.3 billion. This amount would be consistent with the bar graph accompanying the $1.7 billion disclosure, which shows 2011 to represent ¼ of the 2016 forecast amount.  Other revenues for 2016 increased $490 million (or 41.9%) to $1.66 billion compared to $1.17 billion in 2015, primarily as a result of the co-branded credit card agreement with Chase and the resulting required change in accounting methodology. This change represented approximately 90% ($441 million) of the increase to other revenue from 2015. Excluding this impact of the

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agreement with Chase, other revenue increased primarily due to higher ancillary revenues associated with EarlyBird Check-in and A1-15 select boarding positions sold at the airport ($49 million).  EarlyBird Check-In revenues were estimated to be $260 million for 2015. In addition, other revenue items (A1- A15 select early boarding positions sold at the airport, Business Select, inflight Wifi, and pet carriage) were estimated to be $180 million for 2015. Altogether, these activities increased by $49 million for 2016 (see bullet point above). As a group, these ancillary revenue activities contributed $489 million for 2016 ($260+$180+$49).  Customers of Southwest redeemed approximately 8.3 million (2015: 7.3 million) flight rewards, accounting for approximately 12.7% (2015: 12%) of revenue passenger miles flown.  IdeaWorksCompany believes total ancillary revenue for Southwest was $2,832,800,000 for 2016 and was produced by these activities: - Southwest bag revenue: $43.8 million (third checked bag or any bag in excess of 50 pounds). - Other ancillary revenue activities: $489 million. - Rapid Rewards estimate by IdeaWorksCompany: $2.3 billion.  Operating revenue for 2016 was $20,425,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Spirit Airlines Source and Type Multiple ancillary revenue activities Ancillary Revenue $1,078,477,000 As a % of Revenue 46.4% Dollars per Passenger $49.89 Financial Period Calendar year 2016 Total Revenue $2,321,956,000 Passengers 21,618,000 (described as passenger flight segments) Information Source 2016 Form 10-K and Investor Presentation dated November 2016

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Ancillary Revenue  All figures below are in US dollars. Definitions and Other  During 2016 Spirit generated non-ticket revenues of Notes from Financial $1,121,300,000. Non-ticket revenues are generated from Reports air travel-related charges for baggage, passenger usage fee (PUF) for bookings through select distribution channels, advance seat selection, itinerary changes, hotel and rental car travel packages and loyalty programs such as the Free Spirit affinity credit card program and $9 Fare Club. Non- ticket revenues also include revenues derived from the sale of advertising to third parties on the website and on board aircraft.  In its effort to control costs, the airline won’t add fee- generating amenities that require a fixed investment such as a premium class of service and airport clubs.  The airline boasts in its investor presentation that it remains #1 in the non-ticket revenue segment (their phrase for ancillary revenue). Spirit further describes how it will deliver future benefits: - Enhancing merchandising opportunities with deployment of a mobile website. - Increasing take rate through more customized pricing (i.e., dynamic pricing). - Offering more products / capturing a larger piece of the travel budget. - Enhancing loyalty spend by improving benefits and products.  Summary of the primary components of non-ticket revenue: - Baggage: $434,269,000. - Passenger usage fee: 358,920,000 (per passenger fee charged for all bookings except those made at the airport). - Advance seat selection: $110,966,000. - Cancellation and change fees: $42,823,000. - Other: $174,357,000. Free Spirit loyalty program revenue is included in the other category. IdeaWorksCompany does not consider reservation change fees to be ancillary revenue. The airline reported reservation change revenue of $42,823,000 during 2016 and this amount should not be included. This adjustment generates total ancillary revenue of $1,078,477,000.  Spirit has grown average per-passenger non-ticket revenue from $5 in 2005 through the following activities: - Charging for checked and carry-on baggage. - Passing through all distribution-related expenses. - Charging for premium seats and advance seat selection. - Generating subscription revenue from the $9 Fare Club ultra low-fare subscription service.

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- Deriving brand-based revenues from proprietary services, such as the Free Spirit affinity credit card. - Offering third-party travel products (travel packages), such as hotel rooms, ground transportation (rentals and hotel shuttles) and attractions (show or theme park tickets) packaged with air travel. - Selling third-party travel insurance through the website. - Selling inflight products and onboard advertising.  Per passenger segment revenue statistics for 2016: - Average ticket: $55.54 (was $65.25 for 2015). - Average non-ticket: $51.87 (was $54.24 for 2015). - Average fare total: $107.41. The decrease in non-ticket revenue per passenger flight segment was primarily attributable to competitive pressures, notably major U.S. carriers aggressively discounting fare prices.  Cash proceeds from the sale of Free Spirit mileage credits to non-airline third parties: - 2016: $48,882,000. - 2015: $58,005,000. - 2014: $33,819,000. - 2013: $28,496,000. - 2012: $24,938,000. - 2011: $20,954,000. - 2010: $20,748,000. - 2009: $12,008,000. This activity is included under non-ticket revenue.  Operating revenue for 2016 was $2,321,956,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre Baggage Travelport None

Sun Country Source and Type Multiple ancillary revenue activities Ancillary Revenue $50,385,000 As a % of Revenue 9.7% Dollars per Passenger $23.85 Financial Period Calendar year 2016 Total Revenue $519,000,000 Passengers 1,793,000 Information Source USDOT, Bureau of Transportation Statistics,

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Form 41; Schedule P-1.2 and Carrier Snapshots Ancillary Revenue  All figures below are in US dollars. Definitions and Other  Sun Country is privately held but is required to report Notes from Financial revenue and traffic data to the US Department of Reports Transportation.  The carrier offers these a la carte services: checked baggage, extra leg room and preferred seating (no charge for assignments behind the exit row), buy-onboard food and beverage, inflight entertainment devices, and UFlex flight change benefit.  Total ancillary revenue for Sun Country is estimated to be $50,385,000: - Revenue from baggage fees was $17,148,000 for 2016. - Revenue from passenger transport related activities was $32,999,000 million for 2016; for Sun Country this would largely consist of onboard sales (food, beverage, and entertainment). - Revenue from miscellaneous operating revenue (includes pet transportation and sale of frequent flyer miles/points) was $238,000 for 2016. The above results are from the US DOT Bureau of Transportation Statistics website.  Based upon data available at the US DOT Bureau of Transportation Statistics website, operating revenue for 2016 was $519,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

United Source and Type Multiple ancillary revenue activities Ancillary Revenue $6,222,000,000 As a % of Revenue 17.0% Dollars per Passenger $43.46 Financial Period Calendar year 2016 Total Revenue $36,556,000,000 Passengers 143,177,000 Information Source United Continental Holdings Form 10-K for 2016 and Investor Day Presentation 15 November 2016 Ancillary Revenue  All figures below are in US dollars.

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Definitions and Other  Jeff Smisek, chairman, president and chief executive officer, Notes from Financial disclosed the following during the 2nd quarter 2015 Reports conference call: “Ancillary revenue continued to perform well over the second quarter, growing 7% per passenger versus the second quarter of last year. We are now generating more than $23 per passenger in ancillary revenue and remain on track to achieve $3.2 billion of ancillary revenue this year.” A comparable ancillary revenue disclosure could not be found for 2016. However, there is nothing to indicate the $3.2 billion amount was not repeated for 2016. In fact, many of the carrier’s initiatives suggest the amount likely was higher.  United announced its Basic Economy product during November 2016 for implementation during 2017. The fare has the following features: - United’s lowest price. - No onboard service differentiation. - Seat assignment only at time of check-in. - No flight changes permitted. - Overhead (large) carry-on bags not permitted. - Boarding in last group. - FFP miles accrued, but no status.  MileagePlus activity for 2016: Approximately 5.2 million (2015: 5 million) flight awards were used, which was 7.7% (2015: 7.5%) of United’s total revenue passenger miles. Total miles redeemed for flights on United, including class- of-service upgrades, represented approximately 43% (2015: 83%) of the total miles redeemed. In addition, 2 million other rewards (United Club memberships, car and hotel rewards, merchandise and flights on other air carriers) were redeemed in 2016. The MileagePlus database is carried as an asset with a valuation of $1.177 billion.  United disclosed mileage sales of $3.022 billion for 2015 (2015: $2.999 billion). The majority of miles were sold to Chase Bank for activities related to the MileagePlus co- branded credit card which included mileage accrual, airport lounge access, and access to membership lists. The airline is believed to have 90+ million members.  Enhancements made to MileagePlus, such as higher compensation levels from Chase for the credit card, are expected to produce the following revenue increases: 2016: $250 million; 2017: $100 million; 2018: $300 million; 2019: $300 million; and 2020: $300 million.  Total ancillary revenue for 2016 was $6,222,000,000 represented by $3.2 billion (described above as ancillary revenue) and $3.022 billion from the sale of miles.  This data was provided to United management prior to publication of this report. The company did not confirm

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or deny the accuracy of the estimate.  United revenue for 2016 was $36,556,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares, paid seats Sabre Bundled fares, paid seats Travelport Paid seats

Volaris Source and Type Multiple ancillary revenue activities Ancillary Revenue $311,195,673 As a % of Revenue 24.3% Dollars per Passenger $20.74 Financial Period Calendar year 2016 Total Revenue $1,278,719,445 Passengers 15,005,000 Information Source Volaris Quarter 4 2016 Results and Volaris Investor Day Presentation - March 2017 Ancillary Revenue  All figures below are Mexican pesos (MXP) unless Definitions and Other otherwise stated. Notes from Financial  Volaris is a self-described “ultra low cost carrier” based in Reports Mexico. The carrier refers to ancillary revenue as “non- ticket revenue.”  Ancillary revenue was MXP 5,722,000,000 for 2016.  Non ticket revenue growth can be attributed to these factors for 2016: − New products were offered such as priority boarding and more insurance products. − Sales can now occur after check-in through the mobile application. − Better data analytics allow more fine tuning of pricing and better penetration of commission-based offers. − Recent Mexican regulatory changes allowed the application of fees for the first checked bag on flights to the US as of 01 March 2017. Non-ticket revenue was not specifically defined, but is believed to be consistent with the IdeaWorksCompany definition of ancillary revenue.  Revenue for 2016 was MXP 23,512,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13)

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Amadeus None Sabre None Travelport None

Westjet Source and Type Multiple ancillary revenue activities Ancillary Revenue $302,241,178 As a % of Revenue 9.5% Dollars per Passenger $13.77 Financial Period Calendar year 2016 Total Revenue $3,196,040,297 Passengers 21,951,463 (described in the annual report as “Segment Guests”) Information Source Management’s Discussion and Analysis, Financial Statements and Notes for the year ended 31 December 2016 and 3rd Quarter 2016 Earnings Call Transcript Ancillary Revenue  All figures below are in Canadian dollars (CAD). Definitions and Other  WestJet described the success of its WestJet Rewards and Notes from Financial co-branded credit card portfolio in its 3rd quarter Reports earning’s call: “Specifically, in terms of third quarter year-over- year growth, our active rewards members were up 14%, our managed corporate business guests were up 12% and our credit card holders were up approximately 37%.”  Ancillary revenue includes service fees, onboard sales and WestJet RBC MasterCard program revenue. For the year ended December 31, 2016, ancillary revenue was CAD 389,888,000, which is an increase of 15.9% from 2015. This increase is mainly attributable to an increase in Plus seating upgrade sales, first bag fees, pre-reserved seating and the continued success of the WestJet RBC MasterCard program.  Ancillary revenue includes the following activities: − Buy-onboard sales. − Change and cancellation fees. − Excess baggage charges. − Plus seating zone upgrades. − Pre-assigned seating. − Breakage revenue (unredeemed points) associated with the WestJet Rewards Program. IdeaWorksCompany believes WestJet’s ancillary revenue is slightly overstated due to the inclusion of change fees. Regrettably, these can’t be excluded because the amount was not disclosed by WestJet.

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 Revenue for 2016 was CAD 4,122,859,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares, paid seats Sabre Bundled fares, Paid seats Travelport Paid seats

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Non-Reporting Carriers for the Americas The following airlines did not reveal ancillary revenue activity for the most recent full year period:

Aerolineas Argentinas, Air Transat (no disclosure of air revenues), Copa Airlines, Great Lakes Airways, Interjet, NewLeaf (privately held), Porter (privately held), Sunwing (owned by Tui) and VivaAerobus.

Carriers are invited to contact IdeaWorksCompany directly to provide feedback on the statistics provided in this report. Airlines also may directly disclose their ancillary revenue activities to IdeaWorksCompany for inclusion in next year’s report. Please send your comments to Jay “at” IdeaWorksCompany.com.

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Asia and the South Pacific

AirAsia Group Source and Type Multiple ancillary revenue activities Ancillary Revenue $556,725,395 As a % of Revenue 18.7% Dollars per Passenger $9.84 Financial Period Calendar year 2016 Total Revenue $2,971,774,518 Passengers 56,600,000 Information Source AirAsia Berhad Fourth Quarter Report For the Period ended 31 December 2016 and AirAsia Annual Report 2016 Ancillary Revenue  AirAsia Group (Malaysia, Thailand, Indonesia, Philippines, Definitions and Other and India) discloses figures in local currencies, which are Notes from Financial Malaysian ringgit (MYR), Thai baht (THB), and Indonesian Reports rupiah (IDR). These were converted to Malaysian ringgit for the ancillary revenue total by IdeaWorksCompany.  AirAsia (Malaysia) ancillary revenue for 2016 grew 10.4% year-over-year to MYR 1.26 billion with these as the largest contributors: − Checked baggage: 45% − Cargo: 10% (not a qualifying ancillary revenue activity). − Food and beverage: 7% − Seat selection: 6% − Travel insurance 6%  During 2016, AirAsia noted the following activities related to its ancillary revenue initiatives: − Per passenger revenue growth occurred with assigned seating, Fly-Thru connection service, duty-free and merchandise sales. 2.2 million travelers used the Fly- Thru service which provides a single check-in for connecting itineraries. − Santan Combo Meals were discounted to the preorder price of only MYR 10 ($2.30) which successfully improved take rates and financial results. − During the year AirAsia acquired an 80% stake in coffee roaster T&Co to develop an Asean blend of coffee specifically for passengers. − Revenue from the ROKKI service increased by 270% with an increase to 42-equipped aircraft. This provides inflight access to mobile applications such as Gmail, Outlook, WhatsApp, WeChat, Kakao Talk, Viber, and Twitter. Revenue from ROKKI was MYR 503,000. − AirAsia will emphasize data mining to create more

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personalized marketing via email and mobile. − The range of duty-free products will be improved with the intent to match the selection of airport shops. BigDutyFree.com is offered as a pre-order service for passengers.  BIG is the frequent flyer program for the airline. The Group holds a 69.33% share of the company. The program has 10 million members and adds 200,000 members monthly. BIG purchased reward travel on AirAsia having a value of MYR 3,057,000, and AirAsia spent MYR 8,878,000 on the purchase of points during 2016.  Results exclude associated companies: AirAsia Philippines and AirAsia Japan.  AirAsia Group discloses statistics for its operating units, and these have been combined to yield the overall numbers.  AirAsia Malaysia (Berhad) − Revenue: MYR 6,923,882,000. − Passengers: 26,410,922. − Ancillary revenue per passenger: MYR 48. − Ancillary revenue: MYR 1,267,724,256 (adjusted amount for removal of 10% air cargo: MYR 1,140,951,830).  AirAsia Thailand − Revenue: THB 32,466,057,000 (MYR 3,689,267,417). − Ancillary revenue per passenger: THB 323. − Passengers: 17,222,964. − Ancillary revenue (calculated): THB 5,563,017,372 (MYR 632,151,256).  AirAsia Indonesia (currency: IDR) − Revenue: IDR 3,853,613,000,000 (MYR 1,171,285,632). − Ancillary revenue per passenger: IDR 173,879. − Passengers: 4,700,353. − Ancillary revenue (calculated): IDR 817,292,679,287 (MYR 248,411,859).  AirAsia Philippines (currency: PHP) − Revenue: PHP 10,814,573,000 (MYR 916,586,064). − Ancillary revenue per passenger: PHP 419. − Passengers: 3,990,986. − Ancillary revenue (calculated): PHP 1,672,223,134 (MYR 141,728,796).  AirAsia India (currency: INR) − Revenue: INR 8,252,071,000 (MYR 489,005,630). − Ancillary revenue per passenger: INR 376. − Passengers: 2,453,468. − Ancillary revenue (calculated): INR 922,503,968 (MYR 54,666,232).

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 AirAsia Group results do not include AirAsia X (which is listed below).  Group totals − Ancillary Revenue: MYR 2,217,909,973. − Total Revenue: MYR 11,839,101,281.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, meals, paid seats, sports equipment Sabre None Travelport Baggage, meals, paid seats, sports equipment

AirAsia X Source and Type Multiple ancillary revenue activities Ancillary Revenue $161,330,156 As a % of Revenue 16.0% Dollars per Passenger $34.41 Financial Period Calendar year 2016 Total Revenue $1,005,694,213 Passengers 4,688,077 Information Source AirAsia X Annual Report 2016 Ancillary Revenue  All figures are in Malaysian ringgit (MYR). Definitions and Other  Passenger ancillary revenue for 2016 was MYR Notes from Financial 642,715,000. Reports  The following summarizes activities in various ancillary revenue areas for 2016: − Market-specific inflight menus were added. − The Xcite (fee based) inflight entertainment has been improved with better tablets for an enhanced viewing experience and a wider selection of movies. − On 2 September 2016, AirAsia X launched the Group’s AirAsia Premium Red Lounge at klia2 terminal, presenting 24-hour services and facilities such as a buffet, wireless internet access, a lounge area, workstations and even showers. The lounge is one of the first in the world to be offered by a low-cost carrier (LCC) and can accommodate up to 110 guests at any one time. − Baggage and seat fees were increased, which helped contribute to the 3.8% per passenger year-over-year ancillary revenue increase.  The airline earned a commission of 25% on the sale of travel insurance (AirAsia Insure) provided by Tune

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Insurance which is a related party. The commission earned was MYR 3,930,000. It is believed this amount is included in the ancillary revenue total.  Operating revenue for 2016 was MYR 4,006,534,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, meals, paid seats, sports equipment Sabre None Travelport Baggage, meals, paid seats, sports equipment

ANA All Nippon Source and Type Multiple ancillary revenue activities Ancillary Revenue $77,995,221 As a % of Revenue 0.5% Dollars per Passenger $1.50 Financial Period Fiscal year 2016 Total Revenue $17,210,220,684 Passengers 52,087,149 Information Source ANA Holdings Financial Results for the Period ended 31 March 2017 Ancillary Revenue  All figures below are in Japan yen (JPY). Results include Definitions and Other low cost operations of Vanilla Air. Notes from Financial  The airline disclosed two areas of ancillary revenue Reports activity for fiscal year 2016: − Travel services includes the operations of ANA Sky Holiday and ANA Hallo Tour. Operating income (not sales) for 2015 was JPY 3.7 billion. − Trade and retail includes ANA Duty Free Shops and ANA Festa retail outlets. Operating income (not sales) for 2016 was JPY 4.3 billion. Total ancillary revenue disclosed for fiscal year 2015 was JPY 8,000,000,000.  Total revenue for fiscal year 2016 was JPY 1,765,259,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

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Cebu Pacific Source and Type Multiple ancillary revenue activities Ancillary Revenue $165,540,893 As a % of Revenue 12.6% Dollars per Passenger $8.65 Financial Period Calendar year 2016 Total Revenue $1,316,881,148 Passengers 19,130,001 Information Source Cebu Air, Inc. (CEB) FY2016 Results of Operations, Securities and Exchange Commission SEC form 17-A For the fiscal year ended December 31, 2016, and December 2016 Operating Stats Ancillary Revenue  All figures are in Philippine pesos (PHP). Results include Definitions and Other CEBGO (formerly Tiger Airways Philippines). Notes from Financial  The company offers ancillary services such as inflight Reports merchandising (sale of duty-free products on international flights), and travel-related products and services. The definition also includes cancellation fees which IdeaWorksCompany does not consider ancillary revenue. However, the airline separately disclosed this item as PHP 3,961,855,541.  The company disclosed ancillary revenue of PHP 11,743,014,755 for 2016. Deducting the cancellation fee revenue noted above provides an adjusted result of PHP 7,781,159,214. Within this amount, the following activity was disclosed: − Excess baggage charges: PHP 5,496,894,601. − Inflight sales, advance seat selection fee, reservation booking fees and others: PHP 2,284,264,613.  Cebu Pacific participates in the Value Alliance with other low-cost carriers in Southeast Asia. The technology developed by Air Black Box (ABB) allows alliance participants to view, select and book the best-available airfares on flights from any of the airlines in a single transaction, directly from each partner’s website. The ABB technology also provides access to the full suite of ancillary revenue choices offered by individual carriers in the booking path.  Total revenue for 2016 was PHP 61,899,278,892. A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

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China Eastern Source and Type Tour and sightseeing revenue sold to passengers Ancillary Revenue $467,820,776 As a % of Revenue 3.1% Dollars per Passenger $4.60 Financial Period Calendar Year 2016 Total Revenue $14,863,265,664 Passengers 101,741,640 Information Source China Eastern Airlines Corporation Annual Report 2016 Ancillary Revenue  All figures are in China yuan (CNY). Definitions and Other  Income produced by tour operations and other travel Notes from Financial related services: CNY 3,113,000,000. Reports  China Eastern refers to these ancillary revenue activities in its annual report: baggage charges, in-flight sales, paid lounge, services and online insurance sales. The company advised these have increased, but did not disclose a revenue amount.  China United Airlines is the company’s low-cost airline. The carrier is increasing its a la carte emphasis by switching to a buy-on-board food program, introducing baggage charges, inflight sales, and paid lounge access.  The Eastern Miles frequent flyer program had 29.2 million members at the end of 2015 (26.4 for 2015).  China Eastern expanded the partner network associated with its frequent flyer program during 2016. Revenue from the sale of aviation points was 106% above 2015 results.  Revenue for 2016 was CNY 98,904,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

China Southern Source and Type Tour and sightseeing revenue sold to passengers Ancillary Revenue $93,924,827 As a % of Revenue 0.5% Dollars per Passenger $0.82 Financial Period Calendar Year 2016

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Total Revenue $17,279,312,761 Passengers 114,618,630 Information Source China Southern Airlines Corporation 2016 Annual Results Ancillary Revenue  All figures are in China yuan (CNY). Definitions and Other  China Southern disclosed it vigorously promoted value- Notes from Financial added products during 2016, such as onboard upgrade in Reports the flight and prepayment for seat selection. Revenue from this activity was CNY 550 million, which represented an increase of 179.1% above 2015 results. This disclosure includes cabin upgrades, which should be reported as regular passenger revenue. As this likely is a significant portion of the total amount, the disclosure is not counted as ancillary revenue.  Frequent flyer membership (Sky Pearl Club) increased by 19.9% for the year to 30.1 million members. 40% of China Southern revenue is produced by these members.  The airline implemented the ability to book in-transit hotel accommodations; 15,000 bookings for this service occurred during 2016.  Income produced by hotel and travel services income: CNY 625,000,000.  Total revenue for 2016: CNY 114,981,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre Baggage Travelport None

Garuda Indonesia Source and Type Multiple ancillary revenue activities Ancillary Revenue $63,864,766 As a % of Revenue 1.7% Dollars per Passenger $1.82 Financial Period Calendar year 2016 Total Revenue $3,863,921,565 Passengers 35,000,000 Information Source Garuda Indonesia Annual Report 2016 Ancillary Revenue  All figures below are in US dollars. Definitions and Other  The airline made an initial disclosure of ancillary revenue Notes from Financial activity in its 2016 annual report. Ancillary revenue Reports received by the company includes excess baggage fees, and

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on-board food and on-board sales. This includes revenue from GarudaMiles, in-flight, as well as pre-and-revenue from Garuda Miles, and pre- and post flight. Ancillary revenue for 2016 was $63,864,766.  The airline describes specific inflight revenue activities as: - Inflight shop. - Inflight advertisement. - Inflight connectivity. - Inflight material branding. - Food and beverages co-branding. To optimize the ancillary revenue derived from inflight services, the company established the Inflight Ancillary Revenue Unit in March 2016 as part of the Inflight Services organization. Garuda also implemented a new sales on board vendor, incentive scheme and sales targets. The airline is also aggressively seeking onboard advertising revenue. Revenue from this activity was $1.23 million for 2016.  Pre and post-journey ancillary revenue received by the company in 2016 amounted to US$14.92 million (and is included in the $63.8 million total). This ancillary revenue includes: upgrade surcharge, bid upgrade, seat assignment, travel insurance, unaccompanied minor service fee, lounge access, prepaid baggage, Australian visa service fee, oxygen bottle, and other specific requests.  GarudaMiles had 1.9 million members at year end. 32.58% of Garuda’s passengers belong to the program. The program added online reward redemption during 2016 which contributed to a 57% increase of reward ticket redemptions.  Total passenger airline revenue for 2016 was $3,863,921,565.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, paid seats, unaccompanied minor Sabre Medical assistance, paid seats Travelport None

HK Express Source and Type Multiple ancillary revenue activities Ancillary Revenue $90,740,388 As a % of Revenue 24.0% Dollars per Passenger $31.19 Financial Period Calendar year 2016

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Total Revenue $378,085,059 Passengers 2,909,460 Information Source Information directly disclosed by HK Express to IdeaWorksCompany for 2016 and 23 January 2017 HK Express press release Ancillary Revenue  All figures below are in Hong Kong dollars (HKD). Definitions and Other  Total ancillary revenue for 2016 was HKD 703,975,000. Notes from Financial  The airline further disclosed ancillary revenue was Reports generated by these activities: - Baggage: 68.1% - Seat assignments: 8.9% - Insurance & fees: 12.0% - Hotel, car hire, and holiday bookings and frequent flyer: 0.9% - Catering, inflight sales, and other: 10.1%  Total passenger airline revenue for 2016 was HKD 2,933,230,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

IndiGo Source and Type Multiple ancillary revenue activities Ancillary Revenue $168,827,770 As a % of Revenue 5.9% Dollars per Passenger $3.88 Financial Period Fiscal year ended 31 March 2017 Total Revenue $2,881,168,613 Passengers 43,531,952 Information Source IndiGo’s Quarterly (1 through 4) Financial Results Conference Calls and Financial Press Release dated 09 May 2017 Ancillary Revenue  All figures below are in India rupees (INR). Definitions and Other  IndiGo disclosed quarterly ancillary revenue throughout Notes from Financial FY2017: Reports - Quarter 1: INR 5.8 billion. - Quarter 2: INR 5.6 billion. - Quarter 3: INR 5.8 billion. - Quarter 4: INR 5.5 billion.

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The above activity totals INR 22.7 billion.  The Indian government placed a fee cap on the first 5 kg. of checked bags at INR 100, and this reduced ancillary revenue during the year.  The carrier defined ancillary revenue in its IPO prospectus as the following: - Special service requests. - Excess baggage. - Ticket modification and cancellation. - Lounge access. - Convenience fees (associated with bookings). - Cargo services. - Tours and packages. - Inflight sales. - Advertising. - Commissions from travel insurance. The activity includes cargo and ticket changes, which IdeaWorksCompany does not consider ancillary revenue. During its Q2 FY2017 conference call, CFO Rohit Philip disclosed that cargo represents “about half” of ancillary revenue. Accordingly, the investor conference call disclosure is reduced by 50% to yield adjusted ancillary revenue of INR 11,350,000,000.  Total passenger airline revenue for FY2017 was INR 193,696,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport Baggage, fast track, lounge access, meals, paid seats

Japan Airlines Source and Type Primarily partner activities associated with the FFP Ancillary Revenue $209,270,927 As a % of Revenue 1.9% Dollars per Passenger $5.11 Financial Period Fiscal year ended 31 March 2017 Total Revenue $11,303,379,379 Passengers 40,965,174 (international and domestic) Information Source Consolidated Financial Results for the Year Ended 31 March 2017

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Ancillary Revenue  All figures below are in Japan yen (JPY). Definitions and Other  JAL Card Co. Ltd. offers co-branded credit cards such as Notes from Financial the JAL Card and the JAL American Express card. The Reports cards had 3,272,000 members as of March 2017. Operating revenue from the JAL Card program was JPY 20.4 billion. IdeaWorksCompany believes this result represents net revenue for the company and does not include cardholder charge volumes. According to the oneworld website, JAL Mileage Bank has 25 million members.  The airline disclosed revenue of JPY 1,065,000,000 from luggage operations for domestic and international markets.  Total ancillary revenue calculated for Japan Airlines and JAL Group was JPY 21,465,000,000 for fiscal year 2016 (representing JAL Card and luggage items).  JALPAK Co. Ltd. provides vacation packages within JAL Group and reported operating revenue of JPY 172.5 billion. IdeaWorksCompany believes this amount represents gross sales (including the price of lodging) and is not restricted to the commission received on package sales. Accordingly, it is not included as a qualifying ancillary revenue disclosure.  Air transportation segment revenue for fiscal year 2016: JPY 1,159,392,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Jejuair Source and Type Multiple ancillary revenue activities Ancillary Revenue $50,625,179 As a % of Revenue 7.8% Dollars per Passenger $5.89 Financial Period Calendar year ended 31 December 2016 Total Revenue $650,546,625 Passengers 8,600,000 Information Source Jejuair 4th Quarter 2016 Analyst Conference Presentation dated 17 February 2017 Ancillary Revenue  All figures below are in Korean won (KRW). Definitions and Other  Ancillary revenue and other revenue disclosed for the

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Notes from Financial group was KRW 58,100,000,000 for 2016, which Reports represents a 36% increase above 2015.  Jejuair provided additional sales detail for these ancillary revenue categories: - Additional baggage: KRW 8.1 billion. - Other a la carte services including advance seat assignment: KRW 8.2 billion. - Air café: KRW 2.8 billion. - Other inflight sales: KRW 2 billion. One checked bag is allowed per passenger.  Operating revenue disclosed for 2016: KRW 746,600,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Jet Airways Source and Type Multiple ancillary revenue activities Ancillary Revenue $264,574,684 As a % of Revenue 8.4% Dollars per Passenger $10.24 Financial Period Fiscal year ended 31 March 2016 (most recent) Total Revenue $3,148,575,438 Passengers 25,838,090 Information Source Jet Airways (India) Limited Annual Report 2016 and “Domestic airlines tap ancillary revenue sources as fares remain low” article in the Business Standard dated 30 August 2016. Ancillary Revenue  All figures below are in Indian rupees (INR). Definitions and Other  Ancillary revenue disclosed for 2016 was INR Notes from Financial 17,786,900,000 (expressed in lakhs, which was multiplied Reports by 100,000) and represents a 6% increase from FY2015.  The company introduced new a la carte products such as checked baggage, priority check-in, assigned seating, and opened the opportunity for customers to purchase ancillaries on Jetairways.com and through travel agents. The airline is moving to an unbundled pricing structure.  Operating revenue disclosed for FY2016: INR 211,673,300,000.

A la Carte Services Sold Through GDS

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(refer to A la Carte Services note on page 13) Amadeus Paid seats Sabre Paid seats Travelport Paid seats

Jetstar Source and Type Multiple ancillary revenue activities Ancillary Revenue $599,508,814 As a % of Revenue 22.0% Dollars per Passenger $25.73 Financial Period Fiscal year ended 30 June 2016 Total Revenue $2,721,182,400 Passengers 23,300,000 Jetstar Domestic, International, and Asia Information Source Qantas Data Book 2016 and Qantas Supplementary Presentation 24 August 2016 Ancillary Revenue  All figures below are in Australian dollars (AUD). Definitions and Other  Jetstar Group has made various references which can be Notes from Financial pieced together to form a rather accurate summary of its Reports ancillary revenue activity. Ancillary revenue for Jetstar Group was AUD 31.80 per passenger during FY2014. During the 23 February 2016 investor presentation, Jetstar group chief executive Jayne Hrdlicka disclosed ancillary revenue grew by 6% during the first half. This increase, which is assumed to refer to the FY2014 per passenger result, contributed to a higher rate of AUD 33.71 per passenger for FY2015.  Less disclosure was made for FY2016 with a single “3% growth in ancillary revenue” reference (Qantas Supplementary Presentation 24 August 2016) to Jetstar’s domestic Australia operations. Jetstar domestic carries about 57% of total group passengers. Accordingly, an increase of 2% (57% x 0.03%) was applied to AUD 33.71 to yield a 2016 Jetstar Group rate of AUD 34.38 per passenger. This was multiplied by traffic to generate an overall result of AUD 801,054,000 for FY2016.  Jetstar consists of Jetstar Domestic and Jetstar International (including New Zealand based domestic operations). Jetstar also has holdings in Singapore-based Jetstar Asia, Vietnam based Jetstar Pacific and in Jetstar Japan.  Sources of ancillary revenue include: - Activity and day tour bookings. - Call center booking fee.

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- Car hire bookings. - Catering. - Checked baggage. - Club Jetstar (savings subscription). - Comfort packs. - Duty free purchases. - Extra leg room seating and seat assignment. - Faxed itinerary, mailed itinerary. - Hotel bookings. - Inflight entertainment. - Jetstar MasterCard (Australia). - Prepaid extra baggage. - Pricing bundles.  Jetstar Group had total revenue of AUD 3,636,000,000 for FY2016.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Korean Air Source and Type Multiple ancillary revenue activities Ancillary Revenue $874,724,678 As a % of Revenue 8.6% Dollars per Passenger $32.59 Financial Period Calendar year 2016 Total Revenue $10,222,497,620 Passengers 26,840,000 Information Source Korean Air Consolidated Financial Statements for the Year Ended 31 December 2016, and 2016 Korean Air Annual Report (Korean version) Ancillary Revenue  All figures below are in Korean won (KRW). Definitions and Other  The airline disclosed revenue from baggage carriage, Notes from Financial inflight duty free sales, and similar activities as a Reports percentage of quarterly operating revenue during 2013 under the “others” category which included inflight sales. For 2014, this disclosure was changed to add catering services sold to airlines, which does not qualify as ancillary revenue. Korean Air separately disclosed catering services to be KRW 99,403,000,000 for 2016. The following “other revenue” was disclosed for 2016: KRW

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1,103,281,000,000. Net ancillary revenue (less catering services) is KRW 1,003,878,000,000.  Total revenue for 2016 was KRW 11,731,852,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre Unaccompanied minor Travelport None

Nok Air Source and Type Multiple ancillary revenue activities Ancillary Revenue $41,736,341 As a % of Revenue 8.6% Dollars per Passenger $4.88 Financial Period Calendar year ended 31 December 2016 Total Revenue $483,142,192 Passengers 8,560,000 Information Source Nok Airlines Public Company Limited, Annual Report 2016 Ancillary Revenue  All figures below are in Thai bhat (THB). Definitions and Other  Nok has positioned itself as a premium low cost carrier Notes from Financial and includes 15kg checked baggage, seat selection, and Reports basic catering in the price of its tickets.  Ancillary revenues include revenue from travel changes, excess baggage, ticket booking and payment fee and sales from snacks, drinks and souvenirs. The amount associated with travel changes was disclosed, but not believed to represent a meaningful percent of ancillary revenue.  The airline disclosed the distribution of tickets sold during 2015 by channel: - Website and mobile: 67% - Call center: 3.2% - Ticket agents: 14.3% - Others: 15.5%  Ancillary revenue disclosed for 2016 was THB 1,463,210,000.  Total consolidated revenue for 2016 was THB 16,938,200,000. A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None

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Travelport None

Qantas Group Source and Type Primarily partner activities associated with the FFP Ancillary Revenue $1,193,698,000 As a % of Revenue 12.7% Dollars per Passenger $42.38 Financial Period Fiscal year ended 30 June 2016 (FY2016) Total Revenue $9,402,897,600 Passengers 28,164,000 (excludes Jetstar) Information Source Qantas Airways Limited Annual Report for the Year ended 30 June 2016, Qantas Data Book 2016, Qantas Presentation and Supplementary Presentation 2016, and Investor Day 2017 Ancillary Revenue  All figures below are in Australian dollars (AUD). Definitions and Other  These results include Qantas Domestic, Qantas Notes from Financial International, and Qantas Loyalty. Jetstar is the low fare Reports affiliate of Qantas; please see the separate listing.  Qantas disclosed the following traffic for FY2016: - 21,804,000 Australia domestic passengers. - 6,360,000 international passengers. Total passengers for period: 28,164,000.  The results listed below are for the Qantas Group which includes Qantas and its low cost carrier Jetstar (which participates in the Qantas Frequent Flyer program).  The group disclosed the following activities which qualify as ancillary revenue: - AUD 141 million from retail, advertising and other property revenue. Included in this category is revenue from ongoing long term leases with retail stores at Qantas owned domestic terminals. Qantas generates revenue from utilizing digital advertising assets within the terminals through joint revenue share agreements with media agencies. - Freight terminal fees are also included in this category, which IdeaWorksCompany would not qualify as ancillary revenue. However, Qantas Club membership fee revenue is also not included. It is believed these two items might represent equivalent values (2012 Qantas Club revenue was a substantial AUD 85 million.  Qantas Loyalty (operator of the Qantas Frequent Flyer program) had revenue (essentially billings) of AUD 1.454 billion for FY2016. The program had 11.4 million members as of June 2016, compared to 10.8 million as of June 2015 (an increase of 5.4%). Qantas Loyalty was

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founded in 1987 and was established as a separate segment in 2007.  Qantas Loyalty highlights for the fiscal period include: - Members accrued 120 billion points during 2016. Of these, approximately 40% were accrued on Jetstar and Qantas. The remaining 60% were sold to partners, notably banks associated with the program. - Based upon Qantas internal analysis, 35% of credit card spend in Australia is on Qantas co-branded credit cards. - Qantas Assure (health insurance) launched on 31 March 2016 is an innovative insurance program which allows members to accrue points for leading active lifestyles. - Aquire is Qantas Loyalty’s Australian business rewards program launched in March 2014 and has 120,000 members. - The credit card portfolios associated with the Qantas Frequent Flyer program grew by 3.8% during FY2016. - Qantas Cash launched in August 2013 and has more than $2 billion loaded by members on cards which allow multi-currency payment associated with travel.  More than 4.8 million seats were redeemed for flight awards during FY2016, along with 1.3 million (FY2015: 540,000) rewards from the QFF Store.  IdeaWorksCompany estimates FY2016 ancillary revenue was AUD 1,595,000,000 represented by this activity: - AUD 1.454 billion Qantas Loyalty revenue. - AUD 141 million from ancillary revenue detailed above.  The group did not specifically disclose ancillary revenue activity for FY2016, which includes checked baggage, assigned seating, extra leg room seating, duty-free merchandise, commissions on travel services such as hotel and car rental bookings, and advertising revenue. More than 88% of disclosed ancillary revenue is affiliated with Qantas Loyalty.  Total Group revenue for FY2016 was AUD 16,200,000,000; excluding Jetstar revenue of AUD 3,636,000,000 yields net Qantas Airways revenue of AUD 12,564,000,000. A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, paid seats, sports equipment Sabre Baggage, bundled fares, paid seats Travelport Baggage, paid seats

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Rex Regional Express Source and Type Multiple ancillary revenue activities Ancillary Revenue $1,774,456 As a % of Revenue 0.9% Dollars per Passenger $1.62 Financial Period Fiscal year ended June 30, 2016 Total Revenue $196,010,450 Passengers 1,094,000 Information Source Annual Report for the Financial Year Ended June 30, 2016 and Fiscal Year 2016 Financial Results Presentation Ancillary Revenue  All figures below are in Australian dollars (AUD). Definitions and Other  Results include Rex Regional Express, Air Link, and Pel-Air Notes from Financial Aviation. Reports  Rex sells hotel accommodations, car rentals, and travel insurance at its website. The carrier sells annual memberships for its airport lounge in Sydney. Service fees are charged for payment made by credit card.  The carrier disclosed revenue of AUD 2,371,000 from “other passenger services and amenities.”  Revenue for 2016 was AUD 261,906,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

SpiceJet Source and Type Multiple ancillary revenue activities Ancillary Revenue $97,250,745 As a % of Revenue 10.3% Dollars per Passenger $7.81 Financial Period Fiscal year ended 31 March 2017 Total Revenue $943,412,554 Passengers 12,446,000 Information Source SpiceJet FY2017 Q4 Investor Presentation Ancillary Revenue  All figures below are in India rupees (INR). Definitions and Other  Ancillary revenue was disclosed by the airline in its 4th qtr. Notes from Financial FY2017 investor presentations: INR 6,538,000,000. Reports  Ancillary revenue activities for the airline include:

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- Airport lounges at 7 locations. - Bag Out First: These checked bags are first off the aircraft for speedy departure from the claim area. - Carry More Onboard: Allows travelers to add 5 kg. to the standard 7 kg. carry-on limit. - Credit and debit card fees. - Fly For Sure: Ensures a guaranteed flight if the departure is missed (with 30 minutes) or if the flight is cancelled or delayed by more than 90 minutes. - MyFlexiPlan: This allows consumers to allow one change or cancellation on a segment without penalty. - Pre-Book Meals: Consumers save 10% off the buy-on- board price. - Priority Check In. - Spice Assurance: Premium payouts in the event of flight cancelation, delay, or lost baggage. - Spice Club: Subscription program which offers benefits and free travel vouchers. - SpiceFlex fare bundles. - SpiceMax: Provides extra leg room onboard, complimentary meal and beverage, priority baggage handling and priority check-in for INR 600-1,200. - SpiceTalk SIM cards. - Travel insurance.  The carrier’s revenue disclosure is composed of ancillary revenue and air cargo. IdeaWorksCompany does not define air cargo as ancillary revenue, and believes ancillary revenue is slightly overstated due to the inclusion of air cargo revenues. But these can’t be excluded because the amount was not disclosed by SpiceJet.  Total revenue for the fiscal year ended 31 March 2017 was INR 63,424,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Spring Airlines Source and Type Multiple ancillary revenue activities Ancillary Revenue $106,247,764 As a % of Revenue 8.4% Dollars per Passenger $7.47 Financial Period Calendar year ended 31 December 2016

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Total Revenue $1,266,768,534 Passengers 14,228,330 Information Source Spring Airlines Annual Report for 2016 and Monthly Operational Data December 2016 Ancillary Revenue  All figures are in China yuan (CNY). Definitions and Other  The document was published in Chinese. The following Notes from Financial translations may be helpful for finding information: Reports − Revenue: 收入 − Ancillary Revenue: 辅助收入 − Also called Auxiliary Business Income: 公司辅助业务收入 − Passenger Traffic: 旅客运输量  Ancillary revenue for 2016 was CNY 707,000,000 which represents a 10.2% increase from 2015.  The company developed a number of products to enhance ancillary revenue: - Hotel and car hire bookings. - Excess baggage. - VIP lounge. - Airport shuttle and rail transfer tickets, such as Shenyang, Shijiazhuang and Thailand Surat Thani and airport access to more than 10 bus lines. - Packages for Disney Shanghai.  Total revenue for 2016: CNY 8,429,404,272.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Vietjet Source and Type Multiple ancillary revenue activities Ancillary Revenue $134,770,342 As a % of Revenue 18.9% Dollars per Passenger $9.59 Financial Period Calendar year ended 31 December 2016 Total Revenue $712,219,089 Passengers 14,050,000 Information Source Vietjet Aviation Joint Stock Company

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Separate Financial Statements for the year ended 3l December 2016 and IPO Prospectus dated 16 January 2016. Ancillary Revenue  All figures below are in Vietnamese dong (VND). Definitions and Other  Total ancillary revenue and other revenue disclosed for Notes from Financial the group was VND 3,529,714,000,000 for 2016. Reports  A review of the carrier’s website displays the following ancillary revenue activities: - Extensive onboard catalog of souvenirs, Vietjet branded items, entrees, snacks, beverages, and duty free goods. - Baggage fees, including the first bag (pre-paid and at- airport). - Travel insurance. - Seat assignment including extra leg room. - Flat fee for credit card payment.  Viejet’s ancillary revenue disclosure includes the sale of inflight and duty free merchandise, advertising revenue, commissions, revenue from related passenger services (including change fees), and cargo. Fortunately, the airline disclosed separate activities in its recent prospectus. Those which align with the definition used for this Yearbook are: - Ancillary activity fee: VND 2,881,553,000,000. - Goods in flight: VND 77,406,000,000. - Advertising revenue: VND 23,177,000,000. - Other operating income: VND 23,447,000,000. Domestic and international cargo have not been included. The adjusted ancillary revenue total for the above is VND 3,005,583,000,000.  Operating revenue disclosed for 2016: VND 15,883,565,775,389.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Virgin Australia Source and Type Partner activities associated with the frequent flyer program Ancillary Revenue $245,175,840 As a % of Revenue 6.5% Dollars per Passenger $10.34

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Financial Period Fiscal year ended 30 June 2016 Total Revenue $3,757,716,400 Passengers 23,700,000 Information Source Virgin Australia Group Annual Report 2016 and Annual Financial Report 2016 Ancillary Revenue  All figures below are in Australia dollars (AUD). Definitions and Other  Virgin Australia’s transition to a contemporary full service Notes from Financial airline was officially completed during the 2015 financial Reports year, with the rollout of complimentary food, baggage and entertainment across the mainline domestic network. Results include its Tigerair Australia subsidiary as of 17 October 2016.  Virgin Australia does not own 100% of the Velocity Frequent Flyer Program. Virgin Australia completed the sale of a 35% share of Velocity on 22 October 2014 to “Affinity” (non-controlling interests) for AUD 336 million.  Reportable segment revenue for the Velocity Frequent Flyer program was AUD 327,600,000 for FY2016 and represents the only qualifying ancillary revenue activity disclosed by the airline. The EBIT margin for the program is 42.6%.  The program had 6.3 million members at the end of FY2016, with about 3,000 new members joining each day. Since BP Petrol stations joined the program in April 2015, more that 1 million members have earned points at BP stations.  Annual revenue for the airline was AUD 5,021,000,000 for FY2016.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Animal transport, baggage, paid seats, unaccompanied minor Sabre Bundled fares, baggage, paid seats, unaccompanied minor Travelport Animal transport, baggage, paid seats, unaccompanied minor

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Non-Reporting Carriers for Asia and the South Pacific The following airlines did not reveal ancillary revenue activity for the most recent full year period:

Air Astana (IPO planned), Air China, Air Do (Japanese only), Air India (only 2014/2015 report during research time), Air New Zealand, Asiana, Bangkok Air, Cathay Pacific Airways, EVA Airways, Fiji Airways, GoAir (Wadia Group), Hainan Airlines, Hong Kong Airlines, Juneyao Airlines, Lion Air, (privately held), Malaysia Airlines (no recent annual reports), Peach Aviation (owned by ANA), Philippine Airlines (PAL Holdings, no recent reports), PIA Pakistan (only 2015 report during research time) Singapore, Solaseed Air (documents only in Japanese), Starflyer (documents only in Japanese, no report since 2013), Thai Airways, and Tigerair (now a subsidiary of Singapore Airlines).

Carriers are invited to contact IdeaWorksCompany directly to provide feedback on the statistics provided in this report. Airlines also may directly disclose their ancillary revenue activities to IdeaWorksCompany for inclusion in next year’s report. Please send your comments to Jay “at” IdeaWorksCompany.com.

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Middle East and Africa

Air Arabia Source and Type Multiple ancillary revenue activities Ancillary Revenue $61,716,121 As a % of Revenue 6.0% Dollars per Passenger $7.68 Financial Period Calendar year 2016 Total Revenue $1,028,602,019 Passengers 8,034,000 Information Source Air Arabia Annual Report 2016, Air Arabia Investor Presentations 1st Quarter and Full Year 2016 and Consolidated Financial Statements 31 December 2016 Ancillary Revenue  All revenue below is stated in UAE dirhams (AED). Definitions and Other  The holding company owns 100% of Air Arabia (UAE), Notes from Financial 41% of Air Arabia (Morocco), 49% of Air Arabia (Egypt), Reports and 49% of Air Arabia (Jordan). In addition, the company holds shares in catering and travel companies, and 100% ownership of two hotels in the UAE.  The carrier disclosed it had accomplished a level of ancillary revenue by 2012 equaling “6% of revenue.” This statistic continued to appear through the 1st quarter of 2016 in its financial documents and has not been changed. However, after that point, the carrier stopped making ancillary revenue disclosures. Applying the 6% rate to 2016 revenue yields a result of AED 226,680,000.  The airline disclosed 2016 baggage revenue of AED 43,632,000, down from AED 46,346,000 for 2015.  Revenue for 2016 was AED 3,778,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Emirates Source and Type Checked baggage fees Ancillary Revenue $106,726,308 As a % of Revenue 0.5% Dollars per Passenger $1.90

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Financial Period Fiscal year ended 31 March 2017 Total Revenue $23,158,792,036 Passengers 56,076,000 Information Source Annual Report 2016-2017 of The Emirates Group for the period ended March 31, 2017 Ancillary Revenue  All figures below are in UAE dirhams (AED). Definitions and Other  Emirates did not specifically disclose ancillary revenue, but Notes from Financial it did list FY2016/2017 revenue from excess baggage Reports charges: AED 392,000,000.  The group has holdings in a diverse array of businesses worldwide: restaurants (such as Hudson’s Coffee outlets in Australia), hotels (such as Premier Inn locations in the UAE), and airline catering kitchens. These have not been included as contributing to ancillary revenue because these are general consumer activities and are not primarily directed to Emirates’ passengers.  Revenue for FY2016/2016 fiscal year was AED 85,061,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Bundled fares, paid seats Sabre Bundles fares, paid seats Travelport Paid seats

Ethiopian Airlines Source and Type Checked baggage fees Ancillary Revenue $70,328,225 As a % of Revenue 2.8% Dollars per Passenger $9.16 Financial Period Fiscal year ended 30 June 2016 Total Revenue $2,486,141,354 Passengers 7,680,000 Information Source Ethiopian Airlines Annual Report 2015/2016 and Ethiopian Fact Sheet for FY 2015/2016 Ancillary Revenue  All figures below are in Ethiopian birr (ETB). Definitions and Other  Ethiopian did not specifically disclose ancillary revenue, but Notes from Financial it did list FY2015/2016 revenue from excess baggage Reports charges: ETB 1,540,059,649.  The airline disclosed passenger traffic for 2015/2016 was 20% above the prior fiscal year. Applying this statistic to

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2014/2015 traffic of 6.4 million generates a result of 7,680,000.  Revenue for FY2015/2016 fiscal year was ETB 54,441,953,612.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

flydubai Source and Type Multiple ancillary revenue activities Ancillary Revenue $187,860,083 As a % of Revenue 13.8% Dollars per Passenger $18.06 Financial Period Calendar Year 2016 Total Revenue $1,361,304,948 Passengers 10,400,000 Information Source “flydubai announces 14.4% passenger growth to 10.4 million and profit of AED 31.6 million” press release dated 01 February 2017 Ancillary Revenue  All figures below are in UAE dirhams (AED). Definitions and Other  During October 2016, the airline introduced its OPEN Notes from Financial frequent flyer program which is revenue based. Points are Reports also accrued for a la carte purchases: checked baggage, extra legroom seat, inflight meal, and Inflight entertainment.  OPEN provides a Friends Travel Club feature by allowing up to seven friends to join a single account. The holder of the account, or the "Travel Club Head," receives 100% of the points accrued by the members. A similar program exists for family members.  Ancillary revenue disclosed for 2016 was 13.8% (2015: 15.1%) of revenues or AED 690,000,000. Ancillary revenue items include: inflight entertainment, Wifi, onboard sales, pre-order meals, extra leg room seating, checked baggage allowance, car rental, hotel bookings, travel insurance, and visa facilitation services.  Revenue for 2016 was AED 5,000,000,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13)

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Amadeus None Sabre None Travelport None

Jazeera Airways Source and Type Multiple ancillary revenue activities Ancillary Revenue $13,190,554 As a % of Revenue 7.5% Dollars per Passenger $10.90 Financial Period Calendar Year 2016

Total Revenue $174,748,121 Passengers 1,210,000 Information Source Jazeera Airways Group Consolidated Annual Financial Statements dated 31 December 2016 Ancillary Revenue  All figures below are in Kuwait dinars (KWD). Definitions and Other  Ancillary revenue disclosed for 2016 was KWD 3,982,083. Notes from Financial IdeaWorksCompany believes this activity consists of call Reports center reservation booking fees, and commissions on hotel reservations and car rentals made through the airline.  The airline implemented a novel Park ‘n Fly facility at its hub during 2016 which generates parking and retail revenue for the company, along with creating significant competitive advantage in terms of travel convenience.  Revenue for 2016 was KWD 52,754,535.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

Qatar Airways Source and Type Multiple ancillary revenue activities Ancillary Revenue $640,672,651 As a % of Revenue 6.0% Dollars per Passenger $20.02 Financial Period Fiscal Year Ended 31 March 2017 Total Revenue $10,681,693,406

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Passengers 32,007,000 Information Source Qatar Airways Group Annual Report for Fiscal 2017 and Consolidated Financial Statement dated 31 March 2017 Ancillary Revenue  All figures below are in Qatari riyal (QAR). Definitions and Other  The company disclosed these ancillary revenue activities: Notes from Financial - Sale of duty free goods and beverages: QAR Reports 2,058,785,000. - Advertisement and promotions: QAR 33,669,000. - Operating income (not sales) from the frequent flyer program: QAR 184,414,000. - Income (not sales) from Al Maha airport VIP services: QAR 56,043,000. Total ancillary revenue qualifying activity for 2016: QAR 2,332,911,000.  Qatar also disclosed the cost associated with the “sale of duty free goods and beverages” as QAR 975,474,000 which suggests a profit of QAR 1,083,311,000, or a mark- up of 111% (2015: 115%). Qatar Duty Free (QDF) has significant retail activities at Hamad International Airport (Qatar). QDF operates all retail and dining options at the airport with 40,000 square meters of combined retail, food and beverage facilities.  Company revenues for 2016 were QAR 38,895,745,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Animal transport, baggage, fast track, lounge access, sports equipment Sabre None Travelport None

Royal Jordanian Source and Type Checked baggage fees Ancillary Revenue $6,683,112 As a % of Revenue 0.8% Dollars per Passenger $2.23 Financial Period Calendar Year 2016 Total Revenue $843,169,956 Passengers 3,002,000 Information Source Alia - The Royal Jordanian Airlines Company Consolidated Financial Statements 31 December 2016 Ancillary Revenue  All figures below are in Jordanian dinars (JOD).

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Definitions and Other  Royal Jordanian did not specifically disclose ancillary Notes from Financial revenue, but it did list 2016 revenue from excess baggage Reports charges: JOD 4,742,000.  Revenue for 2016 was JOD 598,271,000.

A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus None Sabre None Travelport None

South African Airways Source and Type Primarily partner activities associated with the FFP Ancillary Revenue $59,446,855 As a % of Revenue 2.9% Dollars per Passenger $8.59 Financial Period Fiscal Year Ended 31 March 2016 Total Revenue $2,083,382,556 Passengers 6,920,697 Information Source South African Airways Integrated Annual Report for 2016 Ancillary Revenue  All figures below are in South African rand (ZAR). Definitions and Other  South African Airways (SAA) did not specifically disclose Notes from Financial ancillary revenue, but it did disclose revenue generated by Reports its Voyager frequent flyer program: ZAR 867,000,000. This equals revenue of ZAR 346.80 per member.  The airline disclosed the following about its Voyager program: - The Voyager program became revenue based during February 2015 mileage accrual. - The program had 2.5 million members at the end of the fiscal year. - 15,000 miles issued every minute and 10,000 miles redeemed. - 31.4% of passengers are active in the program, while accounting for 29.8% of revenue. - 72% of redemption activity occurred on SAA. - Members can accrue miles for duty free shop on aircraft or online.  Ancillary revenue was highlighted as a commercial activity during the year, with a new internet booking engine implemented which will facilitate the ability to charge fees for seat assignments.  Revenue for 2016 was ZAR 30,385,000,000.

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A la Carte Services Sold Through GDS (refer to A la Carte Services note on page 13) Amadeus Baggage, paid seats Sabre Baggage, paid seats Travelport Baggage, medical assistance, paid seats

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Non-Reporting Carriers for the Middle East and Africa The following airlines did not reveal ancillary revenue activity for the most recent full year period:

Air Mauritius, Comair (South Africa), Egyptair (only 2014/2015 report was available during research time), El Al, Etihad, fastjet, flynas (privately held), Kenya Airways, Middle Eastern Airlines (only 2015 report was available during research time), and Oman Air.

Carriers are invited to contact IdeaWorksCompany directly to provide feedback on the statistics provided in this report. Airlines also may directly disclose their ancillary revenue activities to IdeaWorksCompany for inclusion in next year’s report. Please send your comments to Jay “at” IdeaWorksCompany.com.

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Currency Exchange Rates Used for the Worldwide Statistics

Airlines usually disclose revenue in local currency. The overall reporting currency for this guide is the US dollar. The following exchange rates were used to convert amounts from local currencies to the US dollar.

Australian dollar (AUD) = 0.7484 Brazil reais (BRL) = 0.3085 Canada dollar (CAD) = 0.7752 China yuan (CNY) = 0.1503 Colombian peso (COP) = 0.0003 Danish kroner (DKK) = 0.1497 euro (€) = 1.1139 Ethiopian birr (ETB ) = 0.0457 Great Britain pound (GBP) = 1.3279 Hong Kong dollar (HKD)= 0.1289 India rupees (INR) = 0.0149 Japan yen (JPY) = 0.0097 Jordanian dinars (JOD) = 1.4093 Korean won (KRW) = 0.0009 Kuwait dinars (KWD) = 3.3125 Malaysia ringgit (MYR) = 0.2510 Mexican peso (MXP) = 0.0544 Norway kroner (NOK) = 0.1200 Pakistan rupee (PKR) = 0.0096 Philippine peso (PHP) = 0.0213 Russian ruble (RUB) = 0.0156 South African rand (ZAR) = 0.0686 Swedish kroner (SEK) = 0.1185 Singapore dollars (SGD) = 0.7433 Qatari riyal (QAR) = 0.2746 Thai baht (THB) = 0.0285 Turkish lira (TRY) = 0.3454 UAE dirham (AED) = 0.2723 Vietnamese dong (VND) = 0.0000

Currency exchange rates are from XE.com, the Universal Exchange Converter. As effective on 01 July 2016

2017 CarTrawler Yearbook of Ancillary Revenue © IdeaWorksCompany.com LLC Page 108

2017 CarTrawler Yearbook of Ancillary Revenue © IdeaWorksCompany.com LLC Page 109