The airline ancillary services market size was valued at USD 111.0525 Billion in 2023. The airline ancillary services industry is projected to grow from USD 122.7130125 Billion in 2024 to USD 272.765125084127 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 19.01% during the forecast period (2024 - 2032). Rising demand for customized travel experiences, increased passenger demand for in-flight catering services and changes in consumer lifestyle are the key market drivers enhancing the market growth.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Market CAGR for airline ancillary services is driven by the growing low-cost airline operators. These airlines offer low-cost travel tickets compared to other airlines. Over the past few years, these low-cost carriers attracted more travelers and experienced rapid growth worldwide due to rising economic activity and urbanization. In addition, increased demand for hassle-free travel and convenience has supported market growth. The increase in demand for low-cost airlines has led to the development of cost-effective aviation services that are expected to further market growth. In Asia and the Middle East, the low-cost aviation industry has grown significantly over the past decade, and there are no indications that development will slow down in these regions.
Additionally, growing need to expand airport infrastructure in smaller cities. Thus, airports are under continuous development to expand their infrastructure and improve customer experience. Increasing demand for more gates, amenities for longer routes, and more modern air traffic control are expected to further market growth. From component tracking systems to building information modeling, airports are drastically turning to new technologies to facilitate the construction of larger projects. New airport construction projects around the world are developing in an unprecedented way. According to a recent report from Business Wire, the number of projects in the implementation phase reaches USD 377.6 Billion, while those in the planning phase cost USD 215.8 Billion.
The rapidly growing middle class in developing economies significantly impacts the exponential growth of air traveler numbers. The striking growth in the working population in the developing world has increased disposable income and cargo traffic. The emerging middle class was most prominent in China and India, as described by the United Nations. The demand for airline tickets is also expected to vary greatly as the globe continues to emerge from prior economic recession. The need for low-cost airlines has consequently increased as a result of the increase in demand for air travel. The increase in middle-class discretionary income worldwide is driving the tremendous development in air passenger travel.
Additionally, a shift in consumer spending patterns for travel, tourism, and leisure activities is propelling the expansion of the airline ancillary sector. Additionally, with more spending power, consumers spend more on comfort and extra-paid services, supporting market expansion. Airlines' ancillary services industry players seize the chance to increase revenue to meet the diverse customer base's desire for affordable and unique services. To increase their revenue from airline ancillaries, low-cost airlines worldwide partner with theaters and car rental companies, which drives the airline ancillary services market revenue.
The airline ancillary services market segmentation, based on service type, includes baggage fees, onboard retail & a-la-cart, airline retail, airline retail & FFP miles sale, and others. The baggage fees segment dominated the market, accounting for 35% of market revenue (41.86 Billion). In developing economies, category growth as airlines has implemented various pricing strategies, including charging fees based on weight, number of bags, or class of service. Introducing "basic economy" fares with restricted baggage allowances has also contributed to ancillary revenue growth. However, airline retail is the fastest-growing category over the forecast period. Passengers can purchase luxury items, cosmetics, and other products at attractive prices, generating additional airline revenue.
The airline ancillary services market segmentation, based on carrier type, includes full-service carriers and low-cost carriers. The full-service carrier category generated the most income (70.4%) due to the rising popularity of international flights. However, low-cost carrier is the fastest-growing category due to passengers' rising expectations for eating hygienic food; the demand for in-flight catering is expected to increase regardless of the seating class.
Figure 1: Airline Ancillary Services Market by Carrier Type, 2022 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
By region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American airline ancillary services market will dominate, owing to the presence of well-established air transport infrastructure in the region and increased investments in the adoption of cutting-edge digital and novel technologies, which has contributed to the growth of the market in this region. Further, the US airline ancillary services market held the largest market share, and the Canada airline ancillary services market was the fastest growing market in the North American region.
Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 2: AIRLINE ANCILLARY SERVICES MARKET SHARE BY REGION 2022 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe's airline ancillary services market accounts for the second-largest market share owing to the rising number of airline passengers, increasing number of airline operators and non-stop flights. Further, the German airline ancillary services market held the largest market share, and the UK airline ancillary services market was the fastest-growing market in the European region.
The Asia-Pacific airline ancillary services market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to the changing lifestyle coupled with increasing disposable income in the region. in the region. Moreover, China’s airline ancillary services market held the largest market share, and the Indian airline ancillary services market was the fastest-growing market in the Asia-Pacific region.
Leading market players are investing heavily in research and development to expand their product lines, which will help the airline ancillary services market grow even more. Market participants are also undertaking multiple strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the airline ancillary services industry must offer cost-effective items.
Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the airline ancillary services industry to benefit clients and increase the market sector. Major players in the airline ancillary services market, including Deutsche Lufthansa AG (Germany), Delta Air Lines, Inc. (US), American Airlines, Inc. (US), Alaska Air Group, Inc. (US), United Airlines, Inc. (US), and others, are attempting to increase market demand by investing in research and development operations.
SATS Ltd carries out the business of gateway and food services. It offers in-flight catering, commercial catering, food distribution, ground handling, air-sea transfers, and other in-flight services. The company also provides linen and laundry services for the healthcare, aviation and hospitality sectors. SATS offers apron services, passenger services, air cargo, security, low-cost carrier handling and cruise terminal services. It serves the needs of the aviation sector and hosts other businesses in food, hospitality, freight and logistics, healthcare industries, and government. In April 2023, SATS Ltd. acquired air cargo logistics delivers Worldwide Flight Services ("WFS") for EUR 1.3 billion (equivalent to approximately USD 1.8 billion) from a companion of Cerberus Capital Management ("Cerberus"), portraying a firm value of EUR 2,250 million as previously announced. This has helped the company to expand globally.
Alaska Airlines Inc is an airline service provider. The company provides passenger and cargo air services. Its services include flight bookings, travel insurance, optional services and fees, online check-in, reservation services, hotel booking, car bookings, and vacation packages. Alaska Airlines also provides in-flight magazines, pet travel, paid upgrades, unaccompanied minor services, same-day confirmed changes, flight information and route maps. Alaska Airlines maintains a fleet of turboprops and jet aircraft. In October 2022, Alaska Airlines ordered 52 Boeing 737 MAX aircraft with a plan to expand its fleet. The airline stated that by the end of 2023, it is expected to have an all-Boeing mainline fleet.
March 2021: dnata and Cebu Pacific Air (CEB) have expanded their long-term partnership in Asia. In addition to the past multi-year extension of an existing airport service contract at Sydney Airport (SYD), dnata has agreed to deliver a wide range of ground handling assistance to the airline at Melbourne Airport and Singapore Changi Airport.
June 2022: Emirates Flight Catering signed a partnership with Coca-Cola Arena. As the only F&B partner of Dubai's home of live enjoyment, EKFC will deliver a full range of catering and hospitality services, such as food production, menu development, and logistics, as well as service staff for all occasions and conferences.
| Report Attribute/Metric | Details |
| Market Size 2023 | USD 111.05 Billion |
| Market Size 2024 | USD 122.71 Billion |
| Market Size 2032 | USD 272.76 Billion |
| Compound Annual Growth Rate (CAGR) | 19.01% (2024-2032) |
| Base Year | 2022 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2018- 2022 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Services Type, Carrier Type, and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The US, Canada, German, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil |
| Key Companies Profiled | Deutsche Lufthansa AG (Germany), Delta Air Lines, Inc. (US), American Airlines, Inc. (US), Alaska Air Group, Inc. (US), United Airlines, Inc. (US), Southwest Airlines Co. (US), Ryanair DAC (Ireland), EasyJet PLC (UK), Air France-KLM (France), and Air Canada (Canada) |
| Key Market Opportunities | Increased air passengers in various emerging countries coupled with the increasing popularity and trend of availing. |
| Key Market Dynamics | The shift in consumer spending patterns for travel, tourism, and leisure activities |
Airline Ancillary Services Market Highlights:
Frequently Asked Questions (FAQ) :
The airline ancillary services market size was valued at USD 111.05 Billion in 2023.
The market is projected to grow at a CAGR of 19.01% during the forecast period, 2024-2032.
North America had the largest share of the market
The key players in the market are American Airlines, Inc. (US), Alaska Air Group, Inc. (US), United Airlines, Inc. (US), Southwest Airlines Co. (US), Ryanair DAC (Ireland), EasyJet PLC (UK), Air France-KLM (France), and Air Canada (Canada).
The baggage fees category dominated the market in 2023.
The full-service carrier had the largest share in the airline ancillary services market.
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Team Lead - Research With a technical background as bachelor's in mechanical engineering, with mba in operations management , swapnil has 6+ years of experience in market research, consulting and analytics with the tasks of data mining, analysis, and project execution. he is the poc for our clients, for their consulting projects running under the automotive/a&d domain. swapnil has worked on major projects in verticals such as aerospace & defense, automotive and many other domain projects. he has worked on projects for fortune 500 companies' syndicate and consulting projects along with several government projects.
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