Airlines are under constant pressure to remain profitable in a volatile industry known for tight margins. With rising fuel costs, fluctuating demand, and increasing competition from low-cost carriers, traditional revenue models built around seat sales alone no longer cut it.
That’s why ancillary revenue—income from non-ticket sources like baggage fees, seat upgrades, and dynamic travel packages—has become a vital lever for growth. In fact, global airline ancillary revenue hit a record $117.9 billion in 2023, accounting for approximate 15% of total airline revenue worldwide. Hotels, cars, experiences, and insurance can drive 3–5x the revenue of a flight-only itinerary.
So, why do travel packages captivate the interest of airlines and consumers alike? From a consumer perspective, travel packages are a blend of savings and simplicity. Bundling services under one package often translates into significant cost savings, thanks to airlines negotiating favorable deals with hospitality and service partners. Consumers, therefore, reap the economic benefits of these agreements without hassle. Moreover, the convenience of booking an entire trip in one go—finding the perfect hotel and car rental that align with their flight—enhances the travel planning experience, saving time and reducing stress.
For airlines, this means the ability to optimize their inventory and foster stronger partnerships with other sectors of the travel industry. This inter-industry synergy solidifies consumer trust and loyalty, prompting travelers to revisit the airline for future journeys.
Deliver more value to travelers through cost savings and convenience
Increase average order value (AOV) through upsells
Reduce cart abandonment by simplifying booking journeys
Strengthen partnerships across the travel ecosystem
For consumers, it's a no-brainer. One-stop-shop booking, better pricing, and personalized offers remove the complexity of planning a trip. For airlines, it’s a scalable way to capture a greater share of total trip spend—beyond just the flight.
So why isn’t everyone doing it? For many carriers, the right technology just isn’t in place yet to make it scalable and seamless.
Travel packaging is not an innovation per se, but rather an evolution of airlines' strategic offerings. By enhancing their service portfolio with diverse and practical options, airlines can maintain competitiveness within a cutthroat industry and respond more effectively to passenger demands for value-added, cost-effective solutions.
Of course, building and managing these bundles isn’t easy. Airlines must navigate supplier integrations, real-time inventory management, pricing logic, and multi-currency support—not to mention regulatory hurdles and localization needs.
That’s where Switchfly comes in.
Our white-label platform handles the heavy lifting, accelerating the deployment of travel packages and simplifying the process for airlines with limited resources or expertise to embark on full-scale operations.
In doing so, we enable airlines to launch dynamic packaging capabilities quickly—often in as little as 45 days. With a no-code deployment model, multilingual and multicurrency support, and a global inventory of over:
800K+ lodging options
45K+ car rental locations
390K+ unique activities
75K+ airline routes
Switchfly helps airlines scale fast while delivering an intuitive, branded experience to their customers.
For airlines seeking efficient solutions, Switchfly’s no-code capabilities offer a transformational edge. By facilitating multilingual and multicurrency interfaces, Switchfly enables airlines to cater to an international audience while ensuring a smooth, localized booking experience.
The business case for dynamic packaging is clear. According to Travelomatix, packaging contributes up to 18% of top-line revenue for travel agencies and Destination Management Companies (DMCs), a figure that airlines are now replicating through tech-enabled solutions. Airlines that expand their offerings beyond the seat are seeing measurable improvements in customer lifetime value (CLV), loyalty program engagement, and revenue per passenger.
And the opportunity isn’t slowing down. The global holiday packages market is projected to reach $362.6 billion by 2029, with 77% of that revenue expected to come from online channels.
Ancillary revenue is no longer optional—it’s a necessity. And dynamic packaging offers a high-margin, traveler-friendly way to tap into new revenue without reinventing the wheel.
With Switchfly, airlines can turn static loyalty programs and one-off bookings into full-funnel travel ecosystems. The result? More revenue, greater customer retention, and a competitive edge in a crowded market.
Want to see what this could look like for your airline? Connect with our team today.