Low Cost Carrier (LCC) Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| CAGR | 10.00 % |
| Fastest Growing Market | Asia-Pacific |
| Largest Market | North America |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Low Cost Carrier (LCC) Market Analysis
The low-cost carrier market is anticipated to register a CAGR of 10% during the forecast period
- The COVID-19 pandemic had a negative impact on the low-cost carrier market. The onset of the pandemic led to travel restrictions, with various countries worldwide imposing barriers or lockdowns to curb the spread of the virus. As a result, there was a decline in the number of aircraft operations worldwide, and low passenger traffic forced airline operators to ground their aircraft, impacting their revenues. Furthermore, there was a decrease in new aircraft acquisitions, leading to a decline in the production of new aircraft.
- However, with the decline in the pandemic situation, various countries are now easing travel restrictions and encouraging international travel. This has resulted in an increase in air passenger traffic, and low-cost airline companies are acquiring newer aircraft models with advanced features to cater to this growth. Additionally, the decline in the pandemic has led to the production of new aircraft models with advanced capabilities, which low-cost airline companies are acquiring to expand their fleets.
- Post-COVID recovery of the airline sector is expected to be led by LCCs. The operational responsiveness and cost-cutting measures implemented by LCCs had enabled them to address the sudden increase in demand when travel restrictions were eased. As more travelers prioritize affordability over luxury, LCCs are expected to witness growth during the forecast period.
- Low-cost airlines have grown exponentially worldwide over the past few years due to increased economic activities, ease of travel, development of the travel and tourism industry, rapid urbanization, changes in lifestyle, and consumers' preference for low-cost services with non-stop and frequent service. With sustainability becoming a major concern, airlines are focusing on improving aircraft sustainability by reducing carbon emissions, using sustainable aviation fuel, and employing carbon capture technologies. Due to the increase in last-minute bookings and uncertainty around international travel, LCCs are now providing more flexibility to customers regarding cancellations and changes to their trips.
Low Cost Carrier (LCC) Market Trends
By Market Segmentation, Narrowbody Aircraft Type is Expected to Witness Significant Growth During the Forecast Period
- The narrow-body aircraft segment is expected to experience significant growth during the forecast period. Advanced capabilities, along with several other advantages such as low operating costs and fuel efficiency on short-haul routes, have made narrow-body aircraft the most preferred type among low-cost carriers worldwide.
- Currently, the Airbus A321 is the most efficient narrow-body aircraft and is expected to continue leading the market in the coming years. This growth can be attributed to factors such as a 10% cost reduction in A321 classic models and a 20% cost reduction in A321 Neo models.
- Furthermore, the low-cost carrier business model's success has generated enormous demand for newer-generation narrow-body aircraft due to their advantages. Technological advancements in newer-generation narrow-body aircraft are enabling them to fly longer distances. The Boeing B737 and Airbus A320 are two of the most popular narrow-body aircraft. In December 2022, Air India announced a deal to order over 200 Boeing aircraft, including 190 narrow-body 737 MAX aircraft, as part of a historic fleet expansion split with Airbus.
- The demand for narrow-body aircraft is expected to recover faster than that of wide-body aircraft, as domestic demand is projected to return to pre-COVID-19 levels earlier than international passenger demand. Additionally, the return of the 737 MAX to service in late 2020 will further drive the growth of the narrow-body segment. Therefore, these factors will contribute to the narrow-body aircraft segment's growth during the forecast period.
The Asia-Pacific Region Is Expected To Witness Significant Growth During The Forecast Period
- The Asia Pacific region is anticipated to experience substantial growth during the forecast period, driven by significant changes in the air travel market over the past few decades. Factors such as governmental changes, policy modifications, economic growth, and rising incomes have contributed to the growth of air travel in the region. However, the rise of low-cost carriers has played a major role in this growth by offering cheaper fares to access more potential customers.
- The increasing air passenger traffic in the region, coupled with growing aviation operations and 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. In recent years, low-cost carriers in the Asia-Pacific region have witnessed significant growth owing to the ASEAN Open Sky agreements. With a vast population in the region and a significant percentage of it having enough disposable income to make air travel viable, well-run low-cost airlines have immense business opportunities to find success in the region. According to Aviation Business News, the Asia Pacific region is expected to account for approximately 40 percent of future airliner production.
- Additionally, Air Asia announced in September 2022 that they were 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 receiving the most votes from industry players, consumers, media, and travel professionals from all across the region. Such advancements are expected to lead to enormous growth in the Asia-Pacific low-cost carrier market during the forecast period.
Low Cost Carrier (LCC) Industry Overview
Some prominent players in the low-cost carrier market include Indigo, Southwest Airlines Co, SpiceJet Ltd, Spirit Airlines, and Easy Jet Plc, among others. The market is fragmented, and several domestic, regional, and global players are operating in it who continuously strive to gain a significant overall market share. These companies have expanded their presence in various regions to provide flexible travel options, which enables the low-cost carrier industry to carry out its operations effectively and efficiently. With the growth in aviation operations worldwide, it is expected that various players will form new partnerships and alliances to gain a competitive advantage in the market and cater to the needs of their customers as the market demand improves.
Low Cost Carrier (LCC) Market Leaders
Indigo
Southwest Airlines Co
Spicejet Ltd
Spirit Airlines
Easy Jet Plc
*Disclaimer: Major Players sorted in no particular order
Low Cost Carrier (LCC) Market News
January 2023: Indigo expanded its fleet size to 300 aircraft. This strong fleet will enable the airline to meet emerging travel demands by increasing capacity across domestic and international destinations.
December 2022: The low-cost carrier Indigo Airlines announced the launch of 32 new connecting flights between India and Europe, aimed at strengthening international connectivity. These flights will operate to Milan, Manchester, Birmingham, Rome, and Venice, in a codeshare partnership with Turkish Airlines.
Low Cost Carrier (LCC) Market Report - 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
Low Cost Carrier (LCC) Industry Segmentation
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 into domestic and international. By distribution channel, the market has been segmented into 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.
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| Domestic | |
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| Online | |
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Low Cost Carrier (LCC) Market Research FAQs
What is the current Low-Cost Carrier (LCC) Market size?
The Low-Cost Carrier (LCC) Market is projected to register a CAGR of 10% during the forecast period (2024-2029)
Who are the key players in Low-Cost Carrier (LCC) Market?
Indigo, Southwest Airlines Co, Spicejet Ltd, Spirit Airlines and Easy Jet Plc are the major companies operating in the Low-Cost Carrier (LCC) Market.
Which is the fastest growing region in Low-Cost Carrier (LCC) Market?
Asia-Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Low-Cost Carrier (LCC) Market?
In 2024, the North America accounts for the largest market share in Low-Cost Carrier (LCC) Market.
What years does this Low-Cost Carrier (LCC) Market cover?
The report covers the Low-Cost Carrier (LCC) Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Low-Cost Carrier (LCC) Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
LCC Industry Report
Statistics for the 2024 LCC market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. LCC analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
