Airlines miss out on nearly $2B in annual FX revenue, finds new economic analysis from Outpayce
Allowing passengers to pay in their preferred currency typically doubles the profitability of an air ticket
Multi-Currency Pricing already a top five ancillary service for pioneering airline
According to the new analysis, approximately four in every ten tickets purchased using airline websites today are cross currency with the required foreign exchange (FX) conversion typically performed by the passenger’s bank behind the scenes, leaving an untapped source of direct revenue on the table. A handful of pioneering airlines have already taken control of FX on their websites, improving the booking experience by enabling passengers to choose to pay in their preferred currency and generating a new incremental revenue stream from performing the FX conversion.
A new analysis commissioned by Outpayce from Amadeus and undertaken by the Centre for Economics and Business Research highlights the scale of the FX opportunity for airlines. According to the study, if every airline adopted Multi-Currency Pricing on its website the industry stands to generate $1.74B in new incremental revenue each year, based on today’s real-world traveler opt-in rates.
If every passenger purchasing a cross currency ticket opted to pay in their preferred currency (meaning FX services are provided by the airline rather than their bank), the overall FX revenue opportunity for airlines increases to $9.6B annually. Incentivising Multi-Currency Pricing with traveler benefits like loyalty points could help airlines access this larger prize.
The largest FX opportunities are to be found in the Asia Pacific (APAC) and Europe, Middle East and Africa (EMEA) regions where a wide range of different currencies are used, leading to more ‘cross-currency’ tickets and therefore higher demand for FX services.
Region |
Airline Market size, $ Billion |
Cross-currency share of overall sales |
Current opt-in rate for airline provided FX service (MCP) |
Average spread charged by airlines (FX revenue) |
FX revenue opportunity with current opt-in rates, $ million |
FX revenue opportunity with 100% opt-in, $ million |
APAC |
276 |
50.2% |
15.5% |
2.75% |
592 |
3,809 |
WEMEA |
203 |
38.2% |
21.1% |
3.37% |
552 |
2,616 |
NECSE |
81 |
35.1% |
14.0% |
3.63% |
145 |
1,034 |
NORAM |
182 |
29.0% |
22.0% |
2.75% |
318 |
1,448 |
LATAM |
53 |
50.6% |
18.2% |
2.75% |
135 |
741 |
Total |
795 |
- | - | - | 1,742 |
9,648 |
APAC: Asia-Pacific, WEMEA: Western Europe, Middle East, and Africa, NECSE: Northern, Eastern, Central, and Southern Europe, NORAM: North America and LATAM: Latin America
There’s significant passenger demand for FX services and today airlines capture a very small slice of this high‑margin business, with most conversions performed by financial intermediaries. Yet, how an airline prices its offers is integral to its digital experience ‑ with travelers often navigating away from a site when presented with a currency they don’t understand. With our MCP solution, airlines can take control, helping to boost customer satisfaction and conversion, while delivering a new source of revenue.
Damian Alonso Head of Product and Partnerships, Outpayce
For early adopter SriLankan Airlines, passenger take-up of FX Box Multi Currency Pricing has been so significant, the service has become a top five ancillary product - just behind business class upgrades, bag, and seat related ancillaries.
At SriLankan, we’ve been pricing our fares in multiple currencies since 2021, and we’ve made the service available across our key markets. FX is a ‘win‑win’ service because it improves the booking experience for passengers and generates entirely new revenue. My advice to airlines getting started with FX is to ensure the spread you charge is fully transparent to passengers from day one.
Bimali Malalasekara Digital Commerce Manager, SriLankan Airlines
It’s been surprising to see how significant the FX margin contribution can be for airlines. IATA estimate that average profitability per passenger will be approximately $7 (3.6%), this year, while our analysis works with a conservative spread of between 2.75 and 3.63%. It is therefore clear that when passengers choose to use the service, FX can double the profitability of many tickets.
Owen Good Head of Economic Advisory, Centre for Economics and Business Research
You can learn more about the economic opportunity of airline FX Services in Outpayce’s new report available here.
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