Low-Cost Carrier (LCC) Industry Overview
| Study Period: | 2019-2028 |
| Fastest Growing Market: | Asia-Pacific |
| Largest Market: | North America |
| CAGR: | 10 % |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Low-Cost Carrier (LCC) Market Analysis
The Low-Cost Carrier Market is anticipated to register a CAGR of 10% during the forecast period (2023-2028)
The COVID-19 pandemic had a negative effect on the low-cost carrier market. The onset of the pandemic led to restrictions in terms of travel with various countries worldwide imposing barriers or lockdowns to curb the spread of the pandemic. This led to a decline in the number of aircraft operations worldwide and with a decline in the number of air passenger traffic, airline operators were forced to ground their aircraft, and this impacted their revenues. Moreover, there was also a decline in terms of new aircraft acquisitions and this led to a decline in the production of new aircraft.
The decline in the pandemic situation has led to various countries encouraging international travel by removing their travel restrictions. This has led to an increase in the number of air passenger traffic and various low-cost airline companies are currently acquiring newer aircraft models with advanced features in order to cater to this significant growth in terms of air passengers. Moreover, the decline of the pandemic has pushed toward the production of new aircraft models which have advanced capabilities and features, and such are being acquired by low-cost airline companies in order to expand their fleet size.
Post-COVID recovery of the airline sector is expected to be led by LCCs. The operational responsiveness and cost-cutting measures have helped the LCCs address the sudden increase in demand when the travel restrictions were eased. With more travelers opting for affordability over luxury and this will lead to low-cost carriers witnessing growth during the forecast period.
Low-cost airlines have grown exponentially worldwide over the past few years, owing to a rise in economic activities, ease of travel, development of the travel & tourism industry, rapid urbanization, changes in lifestyle, consumers’ preference for low-cost service along with non-stops, and frequent service. With sustainability becoming a major concern, airlines are moving towards improving aircraft sustainability in ways such as reducing carbon emissions, usage of sustainable aviation fuel, and employing carbon capture technologies. Owing to an increase in last-minute bookings and the uncertainty around international travel, low-cost carriers are now providing more flexibility to their customers in terms of cancellations and changes in the trip.
Low-Cost Carrier (LCC) Industry Segments
A Low-Cost Carrier is an airline that does not offer traditional services that are normally included as part of the fare, thereby offering lower fares at the expense of fewer comforts. Low-cost carriers have a lower operating cost structure than other airlines. These companies offer decreased ticket prices to passengers but recoup those losses by charging for a range of extras such as food, priority boarding, seat allocation, and baggage.
The Low-Cost Carrier (LCC) Market has been segmented by aircraft type, destination, distribution channel, and geography. By aircraft type, the market has been segmented into narrow-body aircraft and wide-body aircraft. By destination, the market has been segmented by domestic and international. By distribution channel, the market has been segmented by online and travel agencies. By geography, the market has been segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. Moreover, the report offers a market forecast and is represented by USD million. Furthermore, the report also includes various key statistics on the market status of leading market players and provides key trends and opportunities in the Low-Cost Carrier Market.
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| Wide Body Aircraft |
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| Online | |
| Travel Agency |
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Low-Cost Carrier (LCC) Market Trends
By Market Segmentation, Narrowbody Aircraft Type is Expected to Witness Significant Growth During the Forecast Period
The narrowbody aircraft type is expected to witness significant growth during the forecast period. Advanced capabilities coupled with various other advantages such as low cost of operation and fuel efficiency in short-haul routes have led to narrow-body aircraft being the most preferred type of aircraft to be used by various low-cost carrier companies worldwide. As of the current scenario, the Airbus A321 is the most efficient narrow-body aircraft and will continue to lead as the most preferred narrow-body aircraft type in the coming years. The main factors which contribute towards such growth include a 10% lower cost reduction in A321 classic models as well as a 20% lower cost reduction in A321 Neo models.
Moreover, the success of the low-cost carrier business model has generated a massive demand for newer-generation narrow-body aircraft in recent years due to their advantages. Technological advancements in newer-generation narrow-body aircraft are making them possible to fly longer distances. Boeing’s B737 and Airbus A320 are two of the most-sold aircraft narrow body aircraft. For instance, in December 2022, Air India announced that they are close to completing a deal to order more than 200 Boeing aircraft which includes 190 narrowbody 737 MAX aircraft as a part of a historic fleet expansion that will be split with Airbus.
The demand for narrow-body aircraft is expected to recover faster than wide-body aircraft as domestic demand is expected to return to pre-COVID-19 levels earlier than the international passenger demand. Also, the return of the 737 MAX into service in late 2020 will help the growth of the narrow-body segment. Thus, such factors will lead to growth in the narrowbody aircraft segment during the forecast period.
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The Asia-Pacific Region Is Expected To Witness Significant Growth During The Forecast Period
The Asia Pacific region is expected to witness significant growth during the forecast period. The air travel market in the Asia Pacific region has witnessed drastic changes in the past few decades. Governmental changes, policy modifications, economic growth, and rising incomes have all contributed to air travel growth. On the other hand, much of the growth is attributed to the rise of low-cost carriers, which offer cheaper fares to access more potential customers.
The increasing air passenger traffic numbers in the region coupled with growing aviation operations as well as the acquisition of new and technologically advanced aircraft to cater to customer needs will be the main reason for the growth of low-cost carriers in the region. Over the past few years, the low-cost carriers in the Asia-Pacific region have witnessed significant growth owing to ASEAN Open Sky agreements. The huge population in the region coupled with the percentage of that population that has enough disposable income to make air travel a viable proposition provides immense business opportunities to well-run low-cost airlines to find success in the region. According to the facts provided by Aviation Business News, the Asia Pacific region is expected to account for approximately 40 percent of future airliner production.
Moreover, in September 2022, Air Asia announced that they have been named Asia’s leading low-cost airline cabin crew for the sixth consecutive year and Asia’s leading low-cost airline for the seventh year in a row, at the 29th World Travel Awards. The Malaysian airline emerged as the winner in these categories after garnering the most votes from industry players, consumers, media, and travel professionals from all across the region. Thus, such advancements will lead to low-cost carriers witnessing enormous growth in the Asia-Pacific region during the forecast period
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Low-Cost Carrier (LCC) Market Competitor Analysis
Some of the prominent players in the low-cost carrier market are Indigo, Southwest Airlines Co, SpiceJet Ltd, Spirit Airlines, and Easy Jet Plc amongst others. The market is fragmented and there are several domestic, regional, and global players operating in the market who continuously strive to gain a significant overall market share. These companies have expanded their presence in various regions in order to provide flexible traveling options which will lead the low-cost carrier industry to carry out their operations effectively and efficiently. As the market demand improves with the growth in terms of aviation operations worldwide, it is expected that new partnerships and alliances will be formed by various players to gain a competitive advantage in the market and cater to the needs of their customers.
Low-Cost Carrier (LCC) Market Top Players
Indigo
Southwest Airlines Co
Spicejet Ltd
Spirit Airlines
Easy Jet Plc
*Disclaimer: Major Players sorted in no particular order
Low-Cost Carrier (LCC) Market Recent Development
In January 2023, Indigo announced that they have now expanded their fleet size to 300 aircraft. The strong fleet will help the airline to cater to emerging travel demands with the addition of capacity across domestic and international destination shores.
In December 2022, the low-cost carrier Indigo Airlines announced that they have launched 32 new connecting flights between India and Europe as it aims to strengthen international connectivity. These new connecting flights will fly to Milan, Manchester, Birmingham, Rome, and Venice. Moreover, the flights will operate through a codeshare partnership with Turkish Airlines.
Table of Contents
1. Introduction
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. Research Methodology
3. Executive Summary
4. Market Dynamics
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Industry Attractiveness - Porter's Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5. Market Segmentation
5.1 Aircraft Type
5.1.1 Narrow Body
5.1.2 Wide Body Aircraft
5.2 Destination
5.2.1 Domestic
5.2.2 International
5.3 Distribution Channel
5.3.1 Online
5.3.2 Travel Agency
5.4 Geography
5.4.1 North America
5.4.1.1 United States
5.4.1.2 Canada
5.4.2 Europe
5.4.2.1 Germany
5.4.2.2 United Kingdom
5.4.2.3 France
5.4.2.4 Russia
5.4.2.5 Rest of Europe
5.4.3 Asia-Pacific
5.4.3.1 China
5.4.3.2 Japan
5.4.3.3 India
5.4.3.4 South Korea
5.4.3.5 Rest of Asia-Pacific
5.4.4 Latin America
5.4.4.1 Brazil
5.4.4.2 Mexico
5.4.4.3 Rest of Latin America
5.4.5 Middle East and Africa
5.4.5.1 Saudi Arabia
5.4.5.2 United Arab Emirates
5.4.5.3 Kuwait
5.4.5.4 Rest of Middle East and Africa
6. Competitive Landscape
6.1 Vendor Market Share
6.2 Company Profile
6.2.1 Air Arabia PJSC
6.2.2 AirAsia Group Berhad
6.2.3 Alaska Air Group, Inc.
6.2.4 Indigo
6.2.5 Azul S.A
6.2.6 Easy Jet Plc
6.2.7 JetBlue Airways Corporation
6.2.8 Norweigan Air Shuttle
6.2.9 Ryan Air
6.2.10 Southwest Airlines Co
6.2.11 Spicejet Ltd
6.2.12 Spirit Airlines
6.2.13 Westjet Airlines Ltd
7. Market Opportunities and Future Trends
Frequently Asked Questions
What is the study period of this market?
The Low-Cost Carrier (LCC) Market is studied from 2019 - 2028.
What is the growth rate of Low-Cost Carrier (LCC) Market?
The Low-Cost Carrier (LCC) Market is growing at a CAGR of 10% over the next 5 years.
What is Low-Cost Carrier (LCC) Market size in 2019?
The Low-Cost Carrier (LCC) Market is valued at 5 Million USD in 2019.
What is Low-Cost Carrier (LCC) Market size in 2028?
The Low-Cost Carrier (LCC) Market is valued at 8 Million USD in 2028.
Which region has highest growth rate in Low-Cost Carrier (LCC) Market?
Asia-Pacific is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Low-Cost Carrier (LCC) Market?
North America holds highest share in 2022.
Who are the key players in Low-Cost Carrier (LCC) Market?
Indigo, Southwest Airlines Co, Spicejet Ltd, Spirit Airlines, Easy Jet Plc are the major companies operating in Low-Cost Carrier (LCC) Market.
Low-Cost Carrier (LCC) Industry Reports
In-depth industry statistics and market share insights of the Low-Cost Carrier (LCC) Market sector for 2020, 2021, and 2022. The Low-Cost Carrier (LCC) Market research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Low-Cost Carrier (LCC) Market report PDF.
