PUBLISHER: The Insight Partners | PRODUCT CODE: 1452525
PUBLISHER: The Insight Partners | PRODUCT CODE: 1452525
The Europe airline ancillary services market was valued at US$ 45,758.75 million in 2022 and is expected to reach US$ 188,212.30 million by 2030; it is estimated to grow at a CAGR of 19.3% from 2022 to 2030.
Benefits of Frequent Flyer Program fuels the Europe Airline Ancillary Services Market
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. 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 Europe airline ancillary services market.
Europe Airline Ancillary Services Market Overview
Europe accredits with having the world's busiest airspace by reporting more than 20,000 flights a day and ~ 500 million passengers flying every year. The Europe airline ancillary services market in the region is expected to become extensively competitive in the coming years, and the companies would be expected to follow the red-ocean strategy to survive the intense competition in the market. The region has already become a battleground for a mix of technology companies. Since the past couple of years, it has seen tremendous turbulence on the international and domestic front due to the situations such as the COVID-19 pandemic and Ukraine and Russia war. The Russia-Ukraine war and the resulting airspace closures have significantly impacted the airline ancillary services market. With Russia banning the use of routes crossing its airspace and the European Union reciprocating by banning Russian airlines, flights have been canceled or forced to take costly detours. This has led to a decline in airline shares and disruptions in cargo traffic, exacerbating global supply chain challenges. The war has also affected aircraft leasing and prompted airlines to suspend or cancel flights, reducing ancillary service revenues. In June 2022, Lufthansa Group announced flight cancellations and delays due to the restricted European airspace caused by the war, leading to "massive bottlenecks" in the sky. These disruptions have further exacerbated the challenges faced by airlines, including staff shortages and resource limitations, impacting the provision of ancillary services to passengers.
Europe Airline Ancillary Services Market Revenue and Forecast to 2030 (US$ Bn)
Europe Airline Ancillary Services Market Segmentation
The Europe airline ancillary services market is segmented into type, carrier type, and country.
Based on type, the Europe 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 the largest market share in 2022.
By carrier type, the Europe airline ancillary services market is bifurcated into full-service carriers and low-cost carriers. The full-service carriers segment held a larger market share in 2022.
Based on country, the Europe airline ancillary services market is segmented into the UK, Germany, France, Sweden, Spain, Russia, Norway, Denmark, Finland, Austria, and the Rest of Europe. The UK dominated the Europe airline ancillary services market share in 2022.
Air France KLM SA, Delta Air Lines Inc, Deutsche Lufthansa AG, EasyJet Plc, Ryanair Holdings Plc, and United Airlines Holdings Inc are some of the leading companies operating in the Europe airline ancillary services market.