Airline Ancillary Services Market Key Players and Forecast by 2030

The airline ancillary services market size is projected to reach US$ 728.53 billion by 2030 from US$ 168.80 billion in 2022; the market is expected to record a CAGR of 20.1% from 2022 to 2030.

Analyst Perspective:

The key players operating in the airline ancillary services market are witnessing increased demand for services such as entertainment, Wi-Fi, and catering. The growing number of aviation passengers across the world significantly drives the airline ancillary services market. Ancillary revenues are critical to the airline business model; for instance, in developed markets such as North America and Europe, airline companies including Ryanair, Spirit, and Allegiance have recognized ancillary revenues contributing significantly to their total revenues. The trend was soon adopted by rapidly developing economies in Asia Pacific, where carriers such as Air Asia experienced that one-fifth of their revenue comes from ancillary services. Thus, this trend is anticipated to significantly influence airline carrier revenues, particularly in developing economies, which would further contribute to the airline ancillary services market growth.

Airline Ancillary Services Market Overview:

The airline ancillary services market is benefitted from the willingness of the passengers to pay for services that add value to their experience. Seat upgrades, pre-booking of seats, and baggage are a few of the popular ancillary services in demand. Several startups are entering the market to cater to these evolving needs. Further, low-cost carriers are gaining immense importance in the global aviation industry. The robust business models for ticketing, airport services, onboard services, and others facilitate low-cost carriers to attract passengers from all classes of society. The rising demand from passengers for additional services such as inflight food and beverages service, Wi-Fi, and retail is expected to offer several opportunities to startups. Apart from the aforementioned ancillary services, the in-flight entertainment (IFE) service is expected to impact the airline ancillary service industry substantially. As digitally cultured customers, particularly business travelers, anticipate their carriers to facilitate in-flight connectivity options. It was also found that most passengers on a short-haul route demand web access while onboarding to access their digital devices. Thus, the rising demand for IFE is expected to enhance ancillary revenues, positively influencing the airline ancillary services market growth.

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Airline Ancillary Services Market: Strategic Insights

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Airline Ancillary Services Market Driver:

Rising Preference for Air Travel by Middle-Income Passengers

According to the International Air Transport Association (IATA), global air passenger traffic is projected to reach approximately 7.8 billion by 2036, driven primarily by strong demand in emerging economies. As per IATA's press release published in January 2025, international full-year air traffic rose by 13.6% compared to 2023, while the air passenger capacity rose by 12.8%. Asia Pacific airlines recorded a 26.0% rise in full-year international 2024 traffic compared to 2023, demonstrating the strongest year-over-year growth among all major regions. The expanding middle-income population, particularly in China, India, and Southeast Asian countries, is a key enabler of this growth. As disposable incomes rise and urbanization accelerates, more individuals in these regions are prioritizing air travel for both business and leisure purposes. This shift is contributing to a notable surge in global flight activity and, in turn, the demand for airline ancillary services.

Post-COVID-19 pandemic, collaborations between the United Nations World Tourism Organization (UNWTO) and the International Civil Aviation Organization (ICAO), both of which are globally recognized organizations, emphasized the importance of restoring public confidence in international travel. The Memorandum of Understanding signed between UNWTO and IATA in October 2020  aimed to accelerate the recovery of global tourism through joint efforts to streamline travel protocols and enhance safety standards. With increasing air traffic, airlines are intensifying their focus on non-ticket revenue streams. Ancillary services such as in-flight Wi-Fi, seat selection, baggage upgrades, onboard food and beverages, and retail purchases are becoming pivotal to their profitability. According to the IATA, ancillary revenues accounted for more than US$ 100 billion globally in 2023, underscoring their growing importance in overall airline business models. Further, the shift in passenger expectations has prompted airlines to invest in personalized offerings and digital platforms, improving the overall travel experience. For instance, low-cost carriers (LCCs) are increasingly adopting unbundled pricing strategies, allowing middle-income travelers to customize services according to budget and preferences. This approach not only improves customer satisfaction but also enhances ancillary revenue potential.

Thus, a rise in middle-class air travelers is encouraging innovation in customer engagement strategies, in addition to reshaping airline pricing and service models. As airlines aim to differentiate themselves in a competitive market, tailored ancillary services are becoming critical in achieving passenger loyalty and sustaining long-term profitability.

Airline Ancillary Services Market Segmental Analysis:

The airline ancillary services market, by type, is segmented into baggage fees, on-board retail & a la carte, airline retail, FFP mile sale, and others. The baggage fees segment held the largest market share in 2022. Baggage fees are additional charges imposed by airlines for checking in luggage or carrying extra baggage on a flight. These fees are separate from the base ticket price and vary based on factors such as the airline, destination, and baggage weight or size. Baggage fees have become a common practice in the airline industry, allowing airlines to generate extra revenue and offer more flexible fare options to passengers. Travelers can choose to pay for checked baggage or opt for lower base fares if they travel with only carry-on luggage. The implementation of baggage fees has been a significant aspect of the airline ancillary services market, providing airlines with a means to increase profitability and offering passengers choices in their travel experience.

Airline Ancillary Services Market Regional Analysis:

The North America airline ancillary services size was US$ 64.70 million in 2022; the market is expected to register a CAGR of 20.6% during 2023–2030, reaching a value of US$ 289.34 million by 2030. The North America airline ancillary services market is segmented into the US, Canada, and Mexico. The US held the largest share of the North American airline ancillary services market in 2022. According to the data of the Bureau of Economic Analysis, the GDP of the US in the fourth quarter of FY2022 increased by ~2.6%; this growth in the GDP was primarily driven by strong business investment and consumer spending. The airline industry contributes significantly to the overall US economic growth. The rising consumer spending and business investment in the civil airline sector are expected to encourage the airline ancillary services market growth.

Airline Ancillary Services Market Key Player Analysis:

United Airlines Holdings Inc, American Airlines Group Inc, Delta Air Lines Inc, EasyJet Plc, Deutsche Lufthansa AG, Qantas Airways Ltd, Ryanair Holdings Plc, Southwest Airlines Co, The Emirates, and Air France KLM SA are among the major players in the airline ancillary services market.

Airline Ancillary Services Market Regional Insights

The regional trends and factors influencing the Airline Ancillary Services Market throughout the forecast period have been thoroughly explained by the analysts at The Insight Partners. This section also discusses Airline Ancillary Services Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Airline Ancillary Services Market Report Scope

Airline Ancillary Services Market Players Density: Understanding Its Impact on Business Dynamics

The Airline Ancillary Services Market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Airline Ancillary Services Market are:

1. United Airlines Holdings Inc
2. American Airlines Group Inc
3. Delta Air Lines Inc
4. EasyJet Plc
5. Deutsche Lufthansa AG

Disclaimer: The companies listed above are not ranked in any particular order.

Recent Developments:

Inorganic and organic strategies such as mergers and acquisitions are highly adopted by companies in the airline ancillary services market. A few recent key airline ancillary services market developments are listed below:

• In February 2023, United Airlines recently announced its decision to allow families with small children to select adjacent seats at no additional cost. This customer-friendly move acknowledges the importance of providing families a seamless and comfortable travel experience, highlighting United's commitment to enhancing its ancillary offerings.

• In January 2023, Delta Air Lines' announced free Wi-Fi for passengers in the US, made possible through a partnership with T-Mobile. Starting February 1, the frequent flier program members of SkyMiles would enjoy complimentary Wi-Fi. This move, made as a significant step toward enhancing ancillary service offerings, demonstrates Delta's commitment to improving the inflight experience and adding value to its loyal customers.
• In July 2022, EasyJet took steps to improve the customer experience with a series of initiatives for the summer travel season. These include a dedicated customer hotline for families, extended customer service hours, "Helping Hands" at key airports, and the reintroduction of the Twilight Bag Drop service. The airline aims to provide additional support and convenience to passengers, showcasing its commitment to enhancing ancillary services.