Passengers Drive the Airline Ancillary Service

• Published Month : Friday, 23 Aug 2019 02:20 am

The market for airline ancillary service is well embraced by the passengers who are willing to pay for these service that add value to their experience. Seat upgrades, pre-booking of seats, and baggage are some of the popular services.

Significant revenue contribution by the ancillary services to increase its adoption in the economically developing regions

Since the global economic slowdown in the year 2008, the airline profitability was affected by myriad factors. The traditional premium air traffic had fallen down by approximately 10%. However, as the economy stabilized over the decade count of people flying has also grown, where economy fight traffic acquired higher portion. As the air traffic continues to grow the airline companies are snugging over the cost and yet trying to maximize their revenue per customer.

Ancillary revenues are critical to the airline business model, for instance in the developed markets like North America and Europe, airline companies including Ryanair, Spirit and Allegiance have recognized ancillary revenues contributing nearly 20% of total earnings. The trend was soon adopted by rapidly developing economies in Asia Pacific, where some carriers such as Air Asia encountered one fifth of their revenue coming from ancillary services. For the coming years as well, the trend is anticipated to significantly influence the airline carrier revenues, particularly in establishing economies.

This report focuses on the Airline Ancillary Services in Global market, especially in United States, China, South Korea, United Kingdom, Southeast Asia. The market for airline ancillary service is also well embraced by the passengers who are willing to pay for these service that add value to their experience. Seat upgrades, pre-booking of seats, and baggage are some of the popular services. Apart from the aforementioned ancillary services, new emerging services that are expected to have substantial impact on the airline ancillary IFE is one of them. As digitally cultured customers, particularly business travelers, anticipate their carriers to facilitate in-flight connectivity options. It was also found the majority of the passengers on a short haul routes are raising the want for web access while on-board in order to access their digital devices. The rising demand for IFE (in-flight entertainment) is expected to enhance the ancillary revenues when coupled with retailing.

The aviation industry seems to be ready to make a strong come back into the books of investors. However, as digital technologies continue to transform the industry and reshape consumer expectations, airlines are thriving to regularly reenter their core operating assumptions in order to stay relevant. These companies are expected to expertly navigate through uncertain political and economic conditions, while addressing safety and environmental concerns.

Although previous few years have been good for the industry so far, airlines are projected to continue to deliver a delightful consumer experiences and exploring new revenue streams. In such case the airline ancillary services bag massive advantage over other revenue streams. Some of the leading Airline Ancillary Services market include, United Airlines, Delta, American Airlines, Southwest Airlines, Air France/KLM, Ryanair, easyJet, Lufthansa AG, Qantas, and Emirates among others.