Airline Fees Now Grow Twice as Fast as Ticket Sales

The short answer

Airline ancillary revenue — the money airlines earn from bags, seat selection, food, priority boarding, and everything that is not the ticket itself — grew $13.2 billion in 2025 among like-for-like airlines, at double the rate of overall airline revenue growth. That is the headline finding of the 2026 SeatMaps.com Yearbook of Ancillary Revenue by IdeaWorksCompany, released 8 September 2026, which examined 63 airlines. For Frontier Airlines, ancillary revenue is 56.8% of total revenue — the ultra-low-cost carrier earns more from bags and seat fees than from tickets. For United, co-branded credit cards alone brought $11.5 billion in ancillary revenue. The unbundling model is not a side business. It is the business.

What “ancillary revenue” actually means

Ancillary revenue is every dollar an airline collects that is not part of the base fare. Frontier’s 10-K defines it precisely: “the sum of non-fare passenger revenue and other revenue.” That covers:

Baggage fees (checked and carry-on)
Seat selection (including exit rows and extra legroom)
Food and beverage sold onboard
Priority boarding and early boarding
Change and cancellation fees
Frequent flyer program sales (miles sold to credit card partners)
Loyalty program revenue (co-branded credit card partnerships)
Advertising and branding (livery, in-flight magazines)

The key distinction from the hidden-travel-costs post: that post lists individual fees and how to avoid them. This post is about the system — how much airlines earn from fees, why the model exists, and what it means structurally for travellers.

The numbers: who earns what from fees

Frontier: 56.8% of revenue is ancillary

Frontier Group Holdings (ULCC) filed its FY2025 10-K on 18 February 2026. The figures:

Total operating revenue: $3,724 million
Non-fare passenger revenue: $2,117 million (bags, seats, service fees)
Ancillary revenue per passenger: $67.57 in 2025, up from $60.55 in 2021
Ancillary as percentage of total: 56.8%

Frontier is the cleanest case study because it is the only major US carrier that breaks out ancillary revenue as a distinct line item in its 10-K. The company defines “ancillary revenue” as “the sum of non-fare passenger revenue and other revenue” and “ancillary revenue per passenger” as “ancillary revenue divided by passengers.” The 10-K is the source of record — no aggregator, no press summary.

Two valid percentages from the same 10-K, published side by side (house rule: never average):

56.8% of total operating revenue ($2,117M non-fare / $3,724M total) — the company-level view
60.2% of revenue per passenger ($67.57 ancillary / $112.17 total revenue per passenger) — the per-passenger view

Both are computed from Frontier’s own disclosures. The difference is the denominator: total company revenue vs revenue per passenger. Neither is wrong; they measure different things.

Allegiant: 57.3% of every fare is ancillary

Allegiant Travel filed its FY2025 10-K on 26 February 2026. The airline operating statistics table breaks down average fare explicitly:

Average fare — scheduled service (base): $56.89
Average fare — air-related charges: $68.62
Average fare — third party products: $7.73
Average fare — total: $133.25

Ancillary revenue per passenger ($68.62 + $7.73 = $76.35) divided by total average fare ($133.25) = 57.3%. The base fare is only 42.7% of what the average passenger pays.

Allegiant’s 10-K also discloses the trajectory: “We have increased revenue related to these ancillary items from $5.87 per passenger in 2004 to $76.35 per passenger in 2025.” That is a 13x increase in 21 years. The base fare is no longer the product — it is the entry point.

Spirit: ancillary bundled, but the model is the same

Spirit Aviation Holdings (FLYYQ, formerly SAVE) filed its FY2025 10-K on 16 March 2026. Spirit does not break out ancillary revenue separately — its 10-K states that “passenger revenues are primarily comprised of fares and related ancillary items such as bags, seats and other travel-related fees.” The ancillary is bundled into passenger revenue, which makes it invisible to analysts.

What is visible: total operating revenue fell 22.7% to $3,796.7 million in 2025, from $4,913.4 million in 2024. Revenue per passenger segment rose 6.6% to $118.53. Spirit is in Chapter 11 bankruptcy. The unbundling model did not save it — capacity cuts of 24.7% and a 4.0-point load factor decline overwhelmed the fee revenue.

Delta and United: ancillary grows faster than tickets

Delta’s FY2025 10-K (filed 11 February 2026) shows total revenue adjusted increased $1.3 billion, or 2.3%. United’s FY2025 10-K (filed 12 February 2026) shows total revenue increased $1.6 billion, or 3.1%, while “other operating revenue” — which includes loyalty program sales and co-branded card partnerships — increased $362 million, or 10.4%.

United does disclose its ancillary fees — inside Passenger revenue. The Revenue Recognition note states: “The Company recorded $4.8 billion, $4.5 billion and $4.1 billion of ancillary fees within Passenger revenue in the years ended December 31, 2025, 2024 and 2023, respectively.” The 10-K defines these as “baggage fees, premium seat fees, inflight amenity fees, and other ticket-related fees” that are “recognized as Passenger revenue when the travel occurs.” They are inside the ticket number, but they are disclosed. $4.8 billion is larger than Frontier’s entire revenue.

Delta does not break out bag fees separately. Its “other revenue” line includes loyalty program sales but not passenger ancillary items.

United’s co-branded card machine: $11.5 billion

IdeaWorksCompany published a separate report on 2 September 2026: “Co-Branded Cards Help Bring United $11.5 Billion in Ancillary Revenue.” The 18-page report, “United is Winning the Race for Brand-Loyal Consumers,” examines United’s expanding portfolio of products introduced during 2025 and 2026. The $11.5 billion figure is ancillary revenue from co-branded credit card partnerships — miles sold to Chase, the card issuer.

That is larger than Frontier’s entire revenue. It is larger than Spirit’s entire revenue. It is a single revenue line at a single airline, and it comes from selling miles to a bank.

Why the model exists: the Sorensen thesis

Jay Sorensen, President of IdeaWorksCompany and author of the Yearbook, has been studying ancillary revenue since 2007. His explanation of why fees exist is structural, not opportunistic:

“Ancillary revenue gains over the past five years have been powered by the airline industry’s embrace of seat assignment fees and greater reliance on branded fares.”

“Ancillary revenue has demonstrated remarkable durability in both good times and bad. It has adjusted reliably to economic challenges, often more effectively than passenger fares, which truly makes it an economic miracle for the airline industry.”

The second quote is the key. Ancillary revenue is countercyclical — when fares fall in a downturn, fee revenue holds. Airlines can cut base fares to stimulate demand without cutting total revenue, because the fees are separate. That is why the model is permanent.

Djois Franklin, Chief Executive of SeatMaps (which sponsors the Yearbook), frames the growth as a merchandising opportunity rather than a cost to passengers:

“Ancillary revenue growth on the pace and scale revealed in this Yearbook — double the rate of overall revenue and increasing $13.2 billion among like-for-like airlines — puts a spotlight on how both core and ancillary products are merchandised.”

The counterintuitive finding: fees are now the growth engine

The headline number — $13.2 billion in ancillary revenue growth among like-for-like airlines, at double the rate of overall revenue — means something specific. Airlines are not growing by selling more tickets. They are growing by selling more services attached to tickets. The ticket is becoming the loss leader.

This has three consequences for travellers:

The advertised fare is a smaller fraction of what you actually pay. For Frontier, the fare is 43% of revenue; the rest is bags, seats, and services. For United, the co-branded card line alone ($11.5B) is larger than many airlines’ entire revenue.
Fee revenue is more stable than fare revenue. Sorensen’s “economic miracle” observation means airlines can cut fares in a downturn and still hit revenue targets, because fees hold. This is why basic economy fares keep getting cheaper while the total cost of flying keeps rising.
The unbundling is not going to reverse. The $13.2 billion is not a windfall — it is a structural shift in how airlines earn money. No airline will voluntarily un-bundle a revenue line that grows at double the rate of its core product.

The regulatory pushback is stuck

The unbundling model has not gone unchallenged, but the challenges are moving slowly.

DOT fee disclosure rule. The Department of Transportation published a final rule in April 2024 requiring airlines and travel agents to disclose bag fees, change and cancellation fees, and family seating fees during the ticket purchase process. Frontier’s 10-K states: “the rule is being challenged by airline associations and certain individual airlines and, in October 2025, the Fifth Circuit granted the airlines’ request for rehearing. As such, the rule is under further review and any potential impacts are still being evaluated.” The rule exists on paper but is not in effect.

IRS excise tax assessment. Frontier received a revised assessment of $133 million in June 2025 from an IRS excise tax audit covering Q1 2021 through Q2 2023, “related to the applicability of federal excise tax to certain optional ancillary products and services.” Frontier is “actively contesting the assessment” and its appeal is pending. The 10-K notes reserves were established “where we believe a loss for this matter is probable and estimable.” This is the federal government testing whether ancillary products are taxable in the same way as base fares — and the answer is unresolved.

Senate hearing. In December 2024, a US Senate subcommittee held a bipartisan hearing on ancillary fees and unbundled pricing practices. Frontier’s Senior Vice President and Chief Commercial Officer was called to testify. Frontier’s 10-K warns that “if new laws or regulations are adopted that make unbundling of airline products and services impermissible, or more cumbersome or expensive, or if new taxes are imposed on non-fare passenger revenues, our business, results of operations and financial condition could be harmed.”

What is not moving: the DOT’s family seating NPRM is still being evaluated. The fee disclosure rule is in rehearing. The IRS assessment is contested. No regulation has changed the unbundling model. The $13.2 billion in ancillary revenue growth happened while all of this was pending.

What this means for you

Check whether your fare already includes a bag. Frontier and Spirit fares do not include carry-on bags. United Basic Economy charges $45 prepaid / $50 at the lobby / $75 at the gate for a carry-on. The $13.2 billion growth means these fees are not going away — budget for them or choose a carrier that includes them (Southwest still includes two checked bags for most fare classes).
Do the math on basic economy vs main cabin. If a basic economy fare saves $30 but charges $45 for a carry-on, you paid $15 more. Add seat selection ($15-45 depending on the seat) and the gap disappears entirely.
Co-branded credit card sign-up bonuses are airline revenue, not charity. United’s $11.5 billion in co-branded card ancillary revenue means the bank pays United for miles. The sign-up bonus you see is funded by that partnership. It is still worth taking — but understand that you are participating in the ancillary revenue system, not beating it.
Ancillary revenue is countercyclical — expect fees to hold even if fares drop. When the next downturn hits, airlines will cut fares first. They will not cut fees. Sorensen’s five-year observation is that fee revenue holds through downturns more reliably than fare revenue.
The airlines that break out ancillary clearly are the exception. Frontier is the only major US carrier with a clean ancillary revenue line in its 10-K. Delta, United, and American bundle bag fees into passenger revenue. If you want to know how much an airline earns from fees, you have to read the 10-K carefully or rely on the IdeaWorks Yearbook.

What we could not verify

The IdeaWorks Yearbook total ancillary revenue figure for all 63 airlines. The press release states the $13.2 billion increase among like-for-like airlines but does not publish the absolute total. The full 110-page report is behind a registration wall.
Delta and American’s exact ancillary revenue. United discloses $4.8 billion in ancillary fees inside Passenger revenue (Revenue Recognition note, FY2025 10-K). Delta does not break out bag fees separately. American’s 10-K shows total operating revenues of $54.633 billion with loyalty-marketing revenue of $3,511 million and other revenue of $640 million, but does not separately quantify ancillary fees. Spirit describes ancillary products qualitatively but does not publish a figure.
Whether United still charges $45/$50/$75 for carry-on in Basic Economy as of October 2026. The figures come from the existing hidden-travel-costs post (sourced to United’s own carry-on bags page, April 2026). They have not been re-verified against the live page this session.
British Airways fuel surcharges on award tickets. Not researched this session. The existing flying-blue-devaluation post covers award chart changes but not carrier-imposed surcharges.
Web search was unavailable during this session (Firecrawl billing error, HTTP 402). All first-party figures were pulled directly from SEC EDGAR and IdeaWorksCompany’s own press releases via curl. The IdeaWorks press release URLs were found by the social scout through direct HTTP, not through search.