Global Airline Ancillary Services Market Research Report 2024-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2030

Global Airline Ancillary Services Market Research Report 2024-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2030

Airline ancillary services refer to any additional special service requests made by passengers to improve the flight journey and are also a source of income for airlines different from ticket revenue. Ancillary services allow passengers to book additional items related to their flight, such as lounge access, checked baggage, meals, and early boarding benefits. This provides passengers with more choice and flexibility, while also providing airlines with more ways to customize the flight experience and move towards personalization. Airlines around the world see ancillary products and services as a major source of revenue.

Market Overview:

The latest research study on the global Airline Ancillary Services market finds that the global Airline Ancillary Services market reached a value of USD 112571.51 million in 2023. It’s expected that the market will achieve USD 245550.52 million by 2029, exhibiting a CAGR of 13.88% during the forecast period.

The outbreak of COVID-19 has forced government authorities to take drastic measures, including flight restrictions, lockdowns, and travel bans. Like all sectors of the economy, the airline industry is responding to the challenges posed by the ongoing pandemic. In the second quarter of 2020, the pandemic nearly brought activity to a halt at airports around the world. As a result, the total number of passengers for the year was significantly lower than in 2019. Airlines have seen unprecedented declines in passenger numbers due to travel bans and customer uncertainty. At the same time, hotel occupancy rates fell sharply in all regions of the world in the first few months of 2020. Most major airlines, online booking sites, hotel groups, and cruise lines have reported substantial losses in 2020. Cost-cutting measures such as layoffs, furloughs, and pay cuts have become the norm, and many businesses are drawing on lines of credit. Manufacturers of industrial components that support these businesses have been forced to cut production sharply. The crisis puts at risk hundreds of millions of direct tourism jobs around the world, many of them in small and medium-sized enterprises.

Some countries had implemented travel requirements such as visas and vaccinations (for example for yellow fever) before the COVID-19 outbreak, and airlines informed passengers accordingly. In the wake of the COVID-19 pandemic, the section on travel restrictions has been expanded to include COVID-19 status. Over time, health and immigration information will be automated in real time and track every trip and passenger. Mass cancellations, and the ensuing flood of coupons and delayed refunds, have airlines focusing on the complexities of the ticket change process. They focus on simplifying things, such as designing services that automate refunds and changes in a fully self-service model. In addition, domestic and regional travel is on the rise in response to the COVID-19 pandemic, as travelers seek to avoid international travel and explore their own country or nearby destinations. Aviation ancillary service providers must adapt to this trend by offering more localized experiences and ensuring their services comply with local health and safety regulations.

Benefits of Airline Ancillary Services

Ancillary services make up a significant portion of an airline's total revenue. Airlines face enormous cost pressures, including fuel prices, fare competition, maintenance expenses, and labor costs. Ancillary services help offset these costs and contribute to an airline's overall profitability. It also prevents price-destructive competition among airlines by allowing airlines to compete on quality and the variety of services offered. Airlines implement sophisticated pricing and sales strategies to maximize ancillary revenues by offering different pricing tiers, bundled services, and personalized offers based on customer segments and preferences. Ancillary services thus provide passengers and airlines with greater flexibility to structure their ideal travel itinerary.

Low-cost airlines offer cheap travel tickets as compared to other airlines. With increasing economic activity and urbanization, low-cost airlines have attracted more passengers and experienced rapid growth across the globe. In Asia and the Middle East, there is a growing need to expand airport infrastructure and the low-cost airline industry has grown significantly. To increase revenue from airline ancillary services, low-cost airlines around the world partner with theater and car rental companies. As a result, airports are constantly expanding their infrastructure and improving the customer experience. Growing demand for more gates, longer route facilities, and more modern air traffic control is expected to further drive aviation ancillary services market growth.

Region Overview:

In 2022, the share of the Airline Ancillary Services market in Europe stood at 35.35%.

Company Overview:

The major players operating in the Airline Ancillary Services market include American Airlines, Delta Air Lines, United Airlines, Southwest Airlines, Ryanair Airline, etc. Among which, American Airlines ranked top in terms of sales and revenue in 2023.

American Airlines is a provider of passenger airline services. It provides scheduled air transportation for passengers and cargo. Together with our American Eagle regional partners, it offers thousands of flights daily to more than 350 destinations in more than 60 countries. American Airlines has hubs in Charlotte, Chicago, Dallas-Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C. It also collaborates with third-party regional carriers to provide regional jet and turboprop services. The company also offers non-stop flights to transcontinental locations across Central and South America, Asia, Oceania and Europe. It provides freight and mail services globally.

Delta Air Lines is a provider of scheduled air transportation for passengers and cargo. Its portfolio of services includes passenger transport; cargo transport; aircraft management; professional security; training and consulting; aviation solutions; vacation packages; and maintenance, repair and overhaul (MRO). It is a member of the SkyTeam alliance and has bilateral and multilateral marketing alliances with foreign airlines, and service agreements with multiple domestic regional air carriers and serves passengers in small and medium-sized cities. It also has alliances with Aeroméxico, Air France-KLM, China Eastern, Korean Air and Virgin Atlantic.

Segmentation Overview:

By type, FFP segment accounted for the largest share of market in 2022.

Application Overview:

By application, the Full Service Carrier segment occupied the biggest share from 2018 to 2022.

Key Companies in the global Airline Ancillary Services market covered in Chapter 3:

Delta Air Lines
Frontier
American Airlines
Ryanair Airline
Spirit Airlines
Air France–KLM
Air Canada
JetBlue
Southwest Airlines
Alaska Air Group
United Airlines

In Chapter 4 and Chapter 14.2, on the basis of types, the Airline Ancillary Services market from 2019 to 2030 is primarily split into:

Baggage Fees
On-board Retail & A la Carte
Airline Retail
FFP
Others

In Chapter 5 and Chapter 14.3, on the basis of Downstream Industry, the Airline Ancillary Services market from 2019 to 2030 covers:

Full Service Carrier
Low-cost Carrier

Geographically, the detailed analysis of consumption, revenue, market share and growth rate, historic and forecast (2019-2030) of the following regions are covered in Chapter 8 to Chapter 14:

North America (United States, Canada)
Europe (Germany, UK, France, Italy, Spain, Russia, Netherlands, Turkey, Switzerland, Sweden)
Asia Pacific (China, Japan, South Korea, Australia, India, Indonesia, Philippines, Malaysia)
Latin America (Brazil, Mexico, Argentina)
Middle East & Africa (Saudi Arabia, UAE, Egypt, South Africa)