Airline Ancillary Services Market Size, Share, Growth, and Industry Growth by Type (Baggage Fees, On-Board Retail & A la Carte, Airline Retail, FFP Miles Sale and Others) By Application (Full- Service Carrier and Low-Cost Carrier) Regional Forecast to 2027

Updated On: 13 March 2023

REPORT OVERVIEW

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The global airline ancillary services market size is expected to be USD 150 billion in 2021. The global COVID-19 pandemic has been unprecedented and staggering, with airline ancillary services experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. As per our research, the market is projected to touch USD 424 billion by 2027, exhibiting a CAGR of 18.91% during the forecast period. The sudden spike in CAGR is attributable to the market's growth and demand returning to pre-pandemic levels once the pandemic is over.

Ancillary revenue, which is the money made from things other than tickets like baggage fees, onboard meals, and services, is what makes up the airline ancillary market. Baggage handling, seat selection, car wash services offered by gas stations, concessions at sporting events, and restaurant revenue received by hotel owners are just a few examples of the various services that generate income. The income generated by products and services other than a company's core business can also be referred to as this. Associations for air transport, research centers, governing bodies, and travel-related organizations make up the intended target audience.

COVID-19 Impact: Lockdown Scenario Affected the Airline Income

A substantial portion of society has been impacted by COVID-19. The majority of individuals have lost their jobs as a result of the global pandemic. The expansion of various sectors has been impacted. Shutting down flight services as a result of the lockdown scenario has had a significant impact on airline income. Moreover, the income and profit margin have also been affected by the severe border restrictions imposed by some nations. Disruptions to supplier networks have also widened the gap between supply and demand.

However, by carefully planning in accordance with the demands of its industry, the airline's auxiliary service business is predicted to rebound following the pandemic. Additionally, almost all businesses have begun to operate as a result of major country governments changing travel regulations in response to improvements in global conditions.

LATEST TRENDS

"Extensive Research and Development in the Industry to Boost the Market"

An increase in demand for airline ancillary services on a worldwide scale. Numerous potential prospects in the worldwide market are provided by the extensive research and development taking place in this industry. Additionally, there is a greater market desire for technologies that might give passengers better comfort. The global market has a number of growth opportunities during the anticipated period due to developments in in-flight connectivity solutions and the introduction of the BYOD concept.

Segmentation

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• By Type Analysis

By type, market is segmented into baggage fees, on-board retail & a la carte, airline retail, ffp miles sale and others. The baggage fees segment will dominate the market in the coming years.

• By Application Analysis

Based on applications, the market is classified into full- service carrier and low-cost carrier. The full- service segment will lead the global share through 2028.

DRIVING FACTORS

"Expanding Growth in Working Population to Propel the Market Demand"

The rapidly expanding middle-class group in developing nations has a significant impact on the exponential development in the number of passengers using airways. The expanding region's exceptional growth in the working population has led to an increase in disposable income and freight traffic. China and India saw the majority of the world's growing middle class (as described by the United Nations). In addition, a wide range of demand for air travel is anticipated as the global economy continues to recover from prior recessions. There is now more demand for low-cost airlines as a result of the growth in demand for air travel. In this situation, the players in the ancillary services market for airlines are seizing the chance to increase their revenue through ancillary services in order to meet the diverse customer base's demand for both affordable and exclusive services.

"Partnerships with Theaters and Car Rental Companies to Augment the Demands"

In order to increase their revenue from airline ancillaries, low- cost airlines all over the world are partnering with theaters and car rental companies. For instance, Ryanair had started selling theater tickets. The fact that low-cost airlines, like Spirit Airlines of the United States, accounted for both ticket and non-ticket revenue shows how important ancillary revenues are to low-cost airlines' growth, which in turn drives the market for airline ancillary services worldwide.

RESTRAINING FACTORS

"Rising Variations in Airport Fees to Impede the Market"

There are several limitations that limit the growth of the airline ancillary services industry, despite the fact that it is expected to increase at a growing rate throughout the anticipated period. Because they are out of reach for the people in many developing nations, the rising variation in airport fees is impeding global market expansion. Additionally, the market's ability to develop is sometimes constrained by the ongoing rise in fuel prices. Some airlines, especially those that operate in developing nations, are unable to make the significant initial investment required for these ancillary services. Technical problems that cause delivery delays also significantly slow down the market's expansion.

REGIONAL INSIGHTS

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"North America to Hold the Largest Global Airline Ancillary Service Market Share"

The Airline Ancillary Services Market has been segmented into North American, European, Asia-Pacific, Latin American, and the Middle East and Africa regions based on region. In the global market for airline ancillary services, the Asia-Pacific region holds the largest market share. Furthermore, it is anticipated that this region will continue to experience the fastest growth during the review period. In addition, this region has populous nations like China and India, which boosts demand there. Airlines from North America outsource their work to various Asian nations because there is a surplus of labor there that is affordable.

North America now holds the second-largest market share in the worldwide industry as a result of rising urbanization and industrialization. Another element that influences this region's market demand is the fast-paced way of life that is prevalent there.

Due to the existence of several strong nations including the UK, Russia, Italy, and Germany, the European area holds the third-largest market share in the worldwide market. Additionally, the presence of significant key players in this region offers the region a variety of growth opportunities.

KEY INDUSTRY PLAYERS

"Key Players Focus on Partnerships to Gain a Competitive Advantage "

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead in the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolio.

List of Market Players Profiled

• American Airlines, Inc. (U.S.)
• Southwest Airlines Co. (U.S.)
• Ryanair DAC (Ireland)
• Delta Air Lines, Inc. (U.S.)
• EasyJet PLC (UK.)
• Air France-KLM (France)
• Alaska Air Group, Inc. (U.S.)
• Deutsche Lufthansa AG (Germany)
• Air Canada (Canada)
• United Airlines, Inc. (U.S.)

REPORT COVERAGE

The market research study examines the worldwide market in detail, focusing on important elements such as leading players, product/services or type, and leading end-use applications. Aside from that, the research analyses major advancements and provides insights into lighting market trends. In addition to the causes indicated above, the paper includes a number of other factors that have contributed to recent growth.