Airlines' ancillary revenues grew almost twice as fast as total revenues
Additional services, branded fares and loyalty programmes are becoming an ever-larger part of air transport economics. Among comparable airlines, ancillary revenues in 2025 rose by 13.41%, while their total revenues grew by 7.21%.
Airline revenue Revenue from ancillary products and services grew in 2025 at almost twice the rate of total revenue. According to the new Yearbook of Ancillary Revenue report from IdeaWorksCompany, ancillary revenues at the 58 carriers covered by last year's survey rose by US$13.2 billion, or 13.4 per cent. Total revenues grew by 7.2% over the same period, while passenger traffic grew by only 2.5%.
IdeaWorksCompany analysed 63 airlines, while 30 of them in 2025 generated at least one billion dollars in ancillary revenue. The year before, there were 27 such carriers. Among the main drivers of growth, report author Jay Sorensen highlights seat selection charges and the greater implementation of the branded fares model.
Low-cost carriers continue to demonstrate how far this model can go. Frontier's ancillary segment accounted for 60.21 TP3T of its total revenue, while Jet2.com led the market with $100.73 in ancillary revenue per passenger.
Network carriers are adopting part of the LCC model
The story is no longer limited to luggage, seats and airline food. With nearly $11.6 billion, United had the highest ancillary revenue, while American, Delta, Southwest and United together generated $27.9 billion in revenue connected to frequent flyer programmes.
That also shows why comparisons should be read with caution. Under ancillary revenue, IdeaWorks includes not only à la carte services, but also loyalty activities, commission-based products, advertising and parts of services included in tariff packages.
Distribution is becoming part of the revenue strategy
As airlines generate an increasing share of booking value beyond the base ticket price, the way seats, baggage, fare bundles and premium options are displayed in the sales channel becomes directly linked to revenue.
This particularly increases the value of quality merchandising in indirect distribution. Precisely this is one of the reasons why airlines are pushing direct distribution and the quality of that same distribution, which must meet minimum standards, and this applies to both OTAs and offline channels
