Ancillary services are supplementary offerings provided by airlines to improve customer comfort and elevate the overall travel experience. These services are increasingly adopted by various airlines, from ultra-low-cost carriers to premium heritage airlines, as a way to differentiate and enhance their revenue streams. Key ancillary services include in-flight entertainment, internet solutions, the sale of food and beverages, and offering more comfortable seating options for an additional fee, contributing to the growing market for airline ancillary services.
The demand for ancillary services continues to rise as passengers seek greater personalization and convenience during their travels. Airlines have recognized the potential of these services to not only enhance the customer experience but also boost profitability through additional sales. As competition in the airline industry intensifies, ancillary services have become an essential strategy for airlines to provide added value and meet the evolving preferences of travelers.
The global Airline Ancillary Services Market was valued at US$ 100.5 billion in 2022 and it is anticipated to grow up to US$ 481.3 billion by 2032, at a CAGR of 17.0% during the forecast period.
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- Industry: Manufacturing & Construction
Key trends:
The rising preference for air travel among middle-income passengers is significantly driving the growth of the airline ancillary services market. According to the International Air Transport Association (IATA), the number of global aviation passengers is expected to reach 7.8 billion by 2036. This increase is closely linked to the expanding middle-class population in developing nations, where more people have disposable income to afford air travel. In support of this trend, organizations such as the United Nations World Tourism Organization (UNWTO) and IATA are collaborating to restore global tourism, boosting public confidence in air travel. For instance, in October 2020, the UNWTO and IATA signed a Memorandum of Understanding to jointly promote the recovery of global tourism, further stimulating air traffic growth.
Additionally, the expanding working population in emerging economies is driving the demand for air travel. The rise in disposable income, particularly in countries like China and India, is contributing to an increase in both passenger and freight traffic. This surge in demand has led to a higher need for low-cost carriers, creating opportunities for airlines to boost revenue through ancillary services. By offering affordable yet personalized services, airlines are capitalizing on the growing consumer base, helping to propel market expansion for ancillary services.
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Market Segmentation:
By Carrier Type:
The market is classified into full-service carrier, and low-cost carrier. The full service carrier segment dominated the market in 2022 in terms of revenue and is expected to dominate the market during the forecast period. Owing to the increased popularity of international flights. However, due to customers’ increased expectations for consuming sanitary food, low-cost carriers are the fastest-growing category; demand for in-flight catering is predicted to rise regardless of seating class.
Based on Type:
The Airline Ancillary Services Market is segmented into baggage fees, onboard retail a la carte, airline retail, FFP miles sale, and others. The baggage fees segment is expected to dominate the market during the forecast period. Category expansion has occurred in emerging nations as airlines have employed various pricing techniques, such as collecting costs depending on weight, number of bags, or quality of service.
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Data Summary:
Report Attribute |
Details |
| Market Size in 2022 | US$ 100.5 billion |
| Market Size in 2032 | US$ 481.3 billion |
| Growth Rate (2023-32) | 17.0% |
| Historic Period | 2016-2021 |
| Forecast Period | 2023-2032 |
| Base Year | 2022 |
| Segments Covered | Type, Carrier Type, and Region |
| Key Companies | Southwest Airlines , Air France/KLM, Deutsche Lufthansa AG , American Airlines , Delta Airlines Inc., The Emirates Group, United Airlines Inc., Qantas Airways Ltd., EasyJet PLC , and Ryanair holdings plc among others |
| Regional Scope | North America, Europe, Asia Pacific, Central & South America, Middle East & Africa |
| Analysis Coverage | Market Forecast, Competitive Landscape, Drivers, Trends, Restraints, Opportunities, Value-Chain, PESTLE, Key Events and Developments |
Recent Developments
- In February 2023, United Airlines announced that families with small children would be able to pick nearby seats at no additional cost. This customer-friendly action recognizes the significance of delivering a seamless and comfortable flying experience for families, underlining United’s commitment to improving its ancillary products.
- In January 2023, Delta Air Lines introduced free Wi-Fi for passengers in the United States, made possible through a collaboration with T-Mobile. SkyMiles frequent flyer program members will receive complimentary Wi-Fi beginning February 1. This substantial step towards boosting ancillary service options illustrates Delta’s dedication to improving the in-flight experience and bringing value to its committed customers.
- In July 2022, With a number of efforts for the summer travel season, EasyJet takes measures to enhance the customer experience. These include a dedicated family customer support hotline, longer customer service hours, “Helping Hands” at important airports, and the reinstatement of the Twilight Bag Drop service. The airline hopes to give more assistance and convenience to passengers, demonstrating its commitment to improving auxiliary services.
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Key Players:
- Southwest Airlines
- Air France/KLM
- Deutsche Lufthansa AG
- American Airlines
- Delta Airlines Inc.
- The Emirates Group
- United Airlines Inc.
- Qantas Airways Ltd.
- EasyJet PLC
- Ryanair holdings plc
By Region
- North America (U.S., Canada, Mexico)
- Europe (UK, Germany, France, Italy, Rest of Europe)
- Asia-Pacific (China, Japan, India, South Korea, Rest of Asia-Pacific)
- Latin America (Brazil, Argentina, Rest of Latin America)
- Middle East and Africa (UAE, Saudi Arabia, Rest of Middle East And Africa)
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