At 20.6% CAGR, the North America Airline Ancillary Services Market is projected to be worth US$ 289,342.00 million by 2030, says Business Market Insights

According to Business Market Insights’ research, the North America airline ancillary services market was valued at US$ 64,703.06 million in 2022 and is expected to reach US$ 289,342.00 million by 2030, registering a CAGR of 20.6% from 2022 to 2030. Rising preference of air travel by middle-income passengers, growing contribution of frequent flyer program (FFP) towards enhancing the ancillary revenue, and in-flight retail partnerships are the critical factors attributed to the North America airline ancillary services market expansion.             

The frequent flyer program (FFP) is a loyal and long-lasting way for airline authorities to maintain a good relationship with their regular passengers. With this program, the airlines form several partnership arrangements and cooperative schemes. These include code-sharing agreements resulting in competitive fares and variations in the occurrence of services to increase profits and market share. The airlines constantly award reward points to its frequent flyers through cashback rewards, travel insurance, emergency medical services, and access to airport lounges. Similarly, Travel Clubs worldwide also offer advanced services to enhance airline brands by converting brand affinity into brand equity and adding new ancillary revenue from subscription fees. In December 2022, American Airlines announced changes to its FFP, such as new levels and a lower threshold for receiving perks. The Airline removed its mileage cap for expensive flights and announced new extras, including Avis’s rental car preferred status. This further boosted the loyalty of airlines toward its passengers and enhanced the ancillary services revenue. Further, the airlines are continuously focusing on boosting their margin and offering value-added services to the passengers to maintain a loyal relationship with frequent flyers. Thus, such programs drive the growth of the North America airline ancillary services market.

On the contrary, cost cutting on airline services is impacting negatively on the growth of North America airline ancillary services market. 

Based on type, the North America airline ancillary services market is divided into baggage fees, on-board retail and a la carte services, airline retail, and FFP mile sales. The baggage fees segment held 57.3% market share in 2022, amassing US$ 37.10 billion. It is projected to garner US$ 158.06 billion by 2030 to expand at 19.9% CAGR during 2022–2030.

Based carrier type, the North America airline ancillary services market is bifurcated into full-service carriers and low-cost carriers. The full-service carriers segment held 65.8% share of North America airline ancillary services market in 2022, amassing US$ 42.59 billion. It is projected to garner US$ 181.56 billion by 2030 to expand at 19.9% CAGR during 2022–2030.

Based on country, the North America airline ancillary services market has been categorized into the US, Canada, and Mexico.  Our regional analysis states that the US captured 85.8% share of North America airline ancillary services market in 2022. It was assessed at US$ 55.51 billion in 2022 and is likely to hit US$ 250.61 billion by 2030, exhibiting a CAGR of 20.7% CAGR during 2022–2030.            

Key players operating in the North America airline ancillary services market are Air France KLM SA, American Airlines Group Inc, Delta Air Lines Inc, Deutsche Lufthansa AG, Southwest Airlines Co, and United Airlines Holdings Inc, among others.

• February 2022: United Airlines' recent decision to allow families with small children to select adjacent seats at no additional cost improves the airline's ancillary service. 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.

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