Customers no longer shop for flights based on price and schedule
Ancillary revenue continues to outpace overall airline revenue according to this year’s reports raising the question whether loyalty services could be positioned better in this space.
Among the 58 airlines appearing in both the 2025 and 2026 SeatMaps.com Yearbook of Ancillary Revenue by IdeaWorksCompany, total ancillary revenue increased 13.4%, compared with a 7.2% increase in total revenue . . . that’s nearly twice as fast.
Key findings from the 2026 Yearbook include:
- Billion-dollar ancillary revenue has become routine. Thirty airlines generated at least $1 billion in ancillary revenue in 2025, up from 27 airlines in 2024.
- Frontier Airlines led the world in ancillary revenue as a share of total revenue. Ancillary revenue accounted for 60.2% of the airline’s total revenue.
- Jet2.com achieved a new record for ancillary revenue per passenger. The airline generated $100.73 per passenger, the highest result recorded in any prior Yearbook.
- United Airlines was on top for total ancillary revenue. The carrier’s 2025 result was $11.5 billion, which is 9.3% higher than 2024.
“Ancillary revenue growth on the pace and scale revealed in this Yearbook ‒ double the rate of overall revenue and increasing $13.2 billion among like-for-like airlines – puts a spotlight on how both core and ancillary products are merchandised. As airlines invest in new seat designs and premium capacity, accurate data and visual content help make those high-value options more visible in direct and indirect sales channels, enable airlines to merchandise their cabins more effectively and help passengers make informed choices and know what to expect onboard,” said Djois Franklin, Chief Executive of SeatMaps.
“Ancillary revenue gains over the past five years have been powered by the airline industry’s embrace of seat assignment fees and greater reliance on branded fares,” said Jay Sorensen, President of IdeaWorksCompany and author of the report. Ancillary revenue has demonstrated remarkable durability in both good times and bad. It has adjusted reliably to economic challenges, often more effectively than passenger fares, which truly makes it an economic miracle for the airline industry.”
The 110-page 2026 SeatMaps.com Yearbook of Ancillary Revenue by IdeaWorksCompany is provided free of charge through the sponsorship of SeatMaps.com. The 110-page Yearbook is available for immediate download at: https://ideaworkscompany.com/reports/
What is ancillary revenue and why does it matter?
- Ancillary services—such as seat selection, baggage, and personalised add-ons—are now core revenue drivers for airlines, accounting for over 15% of total revenues.
- This strategic shift is fuelled by evolving technology, smarter distribution, and growing traveller demand for flexibility and customisation.
- Ancillaries benefit both airlines and passengers: they reinforce financial stability, support innovation, and enhance the customer experience.
- The landscape continues to evolve rapidly, with digital retail, AI-driven offers, and new product ideas redefining how airlines engage with and serve today’s travellers.
Ancillaries are the additional services and products airlines offer beyond the base airfare, such as premium seat selection, priority boarding, additional baggage, and even hotel bookings and car rentals. Over the past decade, ancillaries have transformed from mere add-ons to becoming a cornerstone of airlines’ financial health. They represent an invaluable revenue stream in an industry characterized by tight margins and intense competition.
In light of more airlines selling their flights through their direct (airline.com) channels and NDC’s potential to present personalised offerings, the landscape of ancillaries stands at the precipice of exponential growth, instigating a profound paradigm shift in customer service and experience within the airline industry. To navigate this terrain, airlines are increasingly inclined towards holistic decision-making, considering total passenger revenue for each flight as a comprehensive metric.
A primary strategy for achieving this augmentation in total revenue – beyond merely raising fares – is the pursuit of enhanced ancillary revenue. This approach provides an exciting avenue for diversification and personalised service, further contributing to the evolution of the industry.
Significance of ancillary revenues
According to AOG, the intelligence partner for global travel, ancillary revenues are not just a supplemental income source for airlines but have evolved into a critical driver of financial robustness.
Comprehensive research conducted by IdeaWorks and CarTrawler illustrates this shift.
Over the span of less than a decade, global ancillary revenues dramatically rose from $42.6 billion USD in 2013 to over $102 billion USD in 2022. Even more impressive, 2022’s figures almost matched 2019’s record of $109.5 billion USD, despite the disruptions caused by the global pandemic.
Following this chart, it becomes evident that the impressive growth trajectory has elevated ancillaries to a crucial pillar supporting airlines’ financial stability.
This dependency on a strong ancillary segment becomes clear when we delve into the proportion of total airline revenue that is derived from ancillaries. In 2022, a historic high was reached, with ancillary revenues accounting for a staggering 15% of total airline revenue.
Such a significant share underscores the strategic importance of ancillary revenues and highlights the need for airlines to effectively manage this ever-expanding category.
Some top airlines’ ancillary revenue contributions, as calculated by CarTrawler, follow:
- Qatar Airways: 5.2%
- Lufthansa Group: 8.5%
- Air France-KLM: 8.7%
These figures further underline the role of technological advancements and new distribution models, like NDC, in unlocking the full potential of ancillary revenue streams.
Why are airline ancillaries surging?
The significant growth of the ancillary segment didn’t happen in a vacuum. It was driven by a convergence of airline industry trends and consumer behaviour shifts.
The Rise of Low-Cost Carriers (LCCs) and Ultra-Low-Cost Carriers (ULCCs):
These airlines revolutionised the industry with their business models, offering incredibly low base fares and generating profit through additional services. By placing the spotlight on ancillary revenue, these carriers have made it a key lever for profitability and sparked a wider industry trend. This has led to the unbundling of airline products among premium carriers (although not to the same extent). Since then, the unbundling revolution, which began on board budget airlines, has slowly but steadily spread across every aspect of the travel industry.
Easier Distribution of Ancillaries:
Airlines have been exploring a diverse mix of channels to sell ancillaries, including direct channels and third-party Online Travel Agencies (OTAs). The emergence of NDC and its subsequent evolution has supplemented the existing distribution system, smoothing the sale of ancillaries across all channels. This trend is underpinned by advancements in revenue management systems, which not only facilitate dynamic pricing of ancillary products but also support continuous pricing outside a rigid set of rules.
A Shift in Consumer Mindset:
The market trends we’ve seen in the airline industry have also had a knock-on effect on consumer attitudes. Modern travellers seem more willing than ever to pay for (certain) ancillary products. They’ve become accustomed to, and even expect, the ability to customise their travel experience according to their preferences. These findings are supported by McKinsey research, which found that customers no longer shop for flights solely based on price and schedule. Attributes like Wi-Fi availability, in-flight entertainment, seat details and maps, on-time performance, and even environmental impact increasingly affect a customer’s decision to purchase a ticket (although it’s unclear if travellers would be willing to pay for them).
Expert predictions suggest that growth in this sector is far from slowing down. Rather, we can anticipate a double-digit expansion over the next few years, solidifying the critical role of ancillaries in airlines’ revenue streams.
This continued growth underscores the importance for airlines to strategically invest in and optimize, their ancillary offerings.
Technological progress, particularly in the realm of deep learning and artificial intelligence (AI), is primed to give ancillary revenues a further boost. AI enables airlines to optimise revenue by predicting customer behaviour and personalizing ancillary offerings. As these technologies continue to evolve, they will play an increasingly pivotal role in driving airline profitability through ancillary sales.
Benefits for Travellers:
The advent of ancillaries has also enhanced the passenger experience, offering a more personalised and flexible travel journey. By unbundling services and providing add-ons like preferred seating, upgraded Wi-Fi, or lounge access, airlines can cater to a diverse range of customer preferences. Not only does this mean a more tailored journey for passengers, but it also allows them to take control of their expenses, paying for only what they value. As a result, more and more travellers see unbundled fares as a viable way to save money, according to Morning Consult. In fact, this à la carte approach has helped to democratize air travel.
The latter can be seen when taking a look at numbers by CarTrawler again.
- In 2013, the global average one-way fare was $306.20 USD (adjusted to 2022 dollars for inflation).
- Fast forward to 2022, the one-way fare projected by IATA is a significantly reduced $140.69 USD.
This translates to an astonishing 54% inflation-adjusted reduction over the past ten years.
Yet, this trend invites a caveat. As we sail into 2023, airfare prices are projected to inflate by approximately 35-50% compared to the pre-pandemic era, spurred by a confluence of factors such as inflation and macroeconomic shifts. It’s also worth noting that the data from 2022 as a reference point may offer a somewhat distorted perspective, given that numerous markets were inaccessible to more profitable long-haul travel for the majority of the year, potentially suppressing the average fare.