Introduction
Looking ahead to 2035, the airline ancillary services market is forecast to grow from USD 122.71 billion (2024) to USD 832.49 billion, at a CAGR of 19.01%. Let’s explore what the strategic landscape might look like by then.

What to Expect

1. Maturation of Personalization
   More sophisticated customer profiling; ancillaries offered automatically based on past behavior; perhaps dynamic bundling where system suggests ancillaries personalized per passenger.

2. Greater Blending of Digital and Physical
   App-based preflight upsell; in-flight purchases via mobile; smart boarding gates; kiosks for ancillaries at airports.

3. Subscription Models & Loyalty Upsell
   Airlines may offer subscription tiers (e.g., a monthly/annual fee) that include ancillaries as part of the membership. Loyalty programs will be central for cross-selling ancillaries.

4. Ancillary Retail Expands
   Airline retail likely to include more non-traditional items (local goods, digital content, experiences) and perhaps more collaboration with local providers at destinations.

5. Regulatory Oversight & Consumer Protection Enforcement
   As ancillary fees grow bigger, more regulation around transparency, fairness, refunds, etc. Airlines will need to adapt.

6. Sustainability and Green Ancillaries
   Carbon offset options, eco-meal choices, greener packaging, wellness services may be bundled in or offered as ancillaries.

7. Technology & Automation Lead the Way
   AI/ML driving dynamic pricing, upselling; seamless payment tech; use of augmented reality/virtual reality (maybe for entertainment or shopping onboard).

Strategic Positioning Recommendations

• Early Adoption of Subscription & Tier Models to build recurring revenue base.

• Focus on Ancillary Retail Expansion, particularly where margins are high.

• Invest in Technology & Data Infrastructure to support personalization and dynamic offers.

• Prioritize Customer Experience & Transparency to maintain trust.

Risks to Watch

• Over-regulation could limit what airlines can charge or how they display fees.

• Consumer fatigue if too many fees or perceived over-charging.

• Technological disruption (e.g. new players, alternate forms of travel) could shift expectations.

Conclusion

By 2035, ancillary services will not be just a side revenue stream—they’ll be central to how airlines compete, differentiate, and generate profit. Airlines who align strategy now—on technology, offerings, customer experience, transparency—will reap the greatest benefits in the era ahead.