Modern airline retailing shifts airlines from selling flight segments to selling complete trips. Travelers plan journeys, not seats. Airlines that expand beyond airfare capture more revenue, richer customer data, and stronger long-term relationships.
For decades, airline commerce optimized seat inventory and fare yield. This model leaves material value on the table. Many still frame modern retailing as a technology problem tied to standards like NDC. The real shift is simpler. Airlines need to sell more of what travelers already plan to buy.
Modern airline retailing closes this gap by expanding the airline storefront to include hotels, ground transport, and destination experiences inside the booking flow. This approach mirrors traveler behavior and drives revenue growth without adding fare pressure.
Selling airfare alone limits growth. When airlines sell only flights and basic ancillaries, travelers leave the airline's site to complete the trip. Each exit transfers intent, data, and margin to an online travel agency.
Expanding retail scope keeps customers inside the airline storefront. Airlines that sell hotels, car rentals, transfers, and activities alongside flights increase session time and average order value while retaining control of the customer relationship.
The opportunity is material. Airlines worldwide are projected to generate approximately 157 billion dollars in ancillary revenue in 2025, up from 148 billion dollars in 2024, according to IdeaWorksCompany. Ancillary revenue represents nearly 16 percent of total airline revenue globally, based on reporting from the International Air Transport Association.
Travelers plan experiences, not components. They evaluate destinations, lodging, transport, and activities together. Airlines already sit at the center of this planning moment, with direct access to customers at their highest point of intent.
High intent drives outcomes. Research from Expedia Group and Skift shows nearly 87 percent of travelers are willing to exceed their original budgets for the right experiences. This behavior translates directly into airline economics. Source: Expedia Group Research
Expanded retail choice increases conversion rates. For some airlines, ancillary revenue accounts for more than 60 percent of total revenue, according to IdeaWorksCompany analysis. Non-flight content also carries higher margins than airfare, protecting profitability without increasing fare pressure.
Retail performance improves when airlines operate as storefronts rather than distribution channels. Online travel agencies infer intent from searches. Airlines know intent from confirmed bookings.
Airlines hold structural advantages. Loyalty programs drive repeat traffic and authenticated users. Booking data provides exact timing and trip context. Brand trust reduces friction during purchase and servicing. Unified order records simplify post-booking changes and reduce servicing cost.
These advantages compound when airlines control merchandising, bundling, and fulfillment across the full journey.
Revenue growth does not require higher fares. It requires higher trip value.
McKinsey estimates improved airline retailing can deliver up to 45 billion dollars in incremental industry value by 2030. This value comes from higher average order value, deeper engagement, and reduced reliance on fare increases. Source: McKinsey Airline Retailing Insights.
Dynamic bundling and contextual offers allow airlines to monetize the journey while preserving pricing flexibility and customer trust.
TWAI helps airlines execute modern airline retailing without disrupting core systems. Airlines use TWAI to launch non-flight content quickly, integrate third-party inventory, and maintain order integrity across partners and channels.
TWAI supports airline storefront strategy through dynamic merchandising, unified order orchestration, reduced integration complexity, and faster time to market. Airlines scale retail revenue without adding operational cost or fragmenting ownership of the customer relationship.
Modern airline retailing requires technology change, but technology is not the goal. The goal is capturing more of the travel wallet while improving customer experience.
Airlines that act now expand relevance across the journey. Airlines that delay remain constrained by airfare economics while others move upstream into full trip retailing.
