Airlines continue to lead the business world, embracing the truism that all customers are different and have different needs. Therefore, the airlines are progressively enhancing their offers to reflect the different needs and values of their customers.
Latest market study on “Airline Ancillary Services Market to 2027 by Type (Baggage fees, Onboard retail and a la carte services, Airline travel retail and FFP miles sales); and Carrier Type (Full-Service Carriers and Low-Cost Carriers) – Global Analysis and Forecast”, The global Airline Ancillary Services market is accounted to US$ 92.89 Bn in 2018 and is expected to grow at a CAGR of 18.5% during the forecast period 2019 – 2027, to account to US$ 412.86 Mn by 2027. The report include key understanding on the driving factors of this growth and also highlights the prominent players in the market and their developments.
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The global airline ancillary service market for the type is fragmented into Baggage fees, Onboard retail and a la carte services, Airline travel retail and FFP miles sales. There have been several changes in the airline industry. In commercial departments at airlines around the world, analytics have taken hold and inform more decisions than ever. Those decisions include how, where, when, and at what price to offer options as diverse as checked baggage, pre-assigned seats, onboard meals, and hotel bookings, all of which fall broadly under the category of ancillary. Revenue from ancillary options has almost doubled as a percentage of total airline income from 4.8% in 2010 to 9.1% in 2016. Some airlines book more than 40% of their passenger revenue from these options. As the percentage grows, and airlines recognize the competitive importance of ancillary, the need for optimization increases. Ancillary merchandising, the art and science of creating and communicating the optimal mix of options at the right price, at the right time, represents a key driver for airline revenues.
There has been constant growth in airline ancillary services industry. Recently, Air Seychelles partnered with Booking.com in order to facilitate accommodation option to its customers. The collaboration further aimed to provide more options to company’s guests who were looking to book their flights and accommodation in one go when travelling. In addition, Singapore Airlines (SIA) partnered with DFASS and SATS in order to establish a joint venture that would engage into travel-associated retail operations in Singapore under the brand names of Scootlogue and KrisShop.
Strategic Insights
Strategic partnership with hospitality transportation industry as a part of the enhancement of the ancillary service offering was observed as the most adopted strategy in global airline ancillary services industry.
2019: Eurowings partnered with FlixBus in order to create a smart travel platform for customers. With this partnership, the company Eurowings aimed to provide its customers with an ability to book tickets with the mobility provider directly through the airline app.
2019: American Airlines and Hyatt Hotels had announced their partnership aiming to provide frequent travelers with enhanced loyalty benefits.
2018: Cooperation of Hamburg Airport and Filo Airport focused to provide access to exclusive retail and food & beverage offers, along with car parking space bookings and lounge access
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Phone : +1-646-491-9876
