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Low Cost Carrier (LCC)  Market Research Report—Global Forecast till 2030

Low Cost Carrier (LCC) Market Research Report: Information by Aircraft Type (Narrow-Body and Wide-Body), Operations (Domestic and International), Purpose (Leisure Travel, VFR, Business Travel, Others), Distribution Channel (Online, Travel Agency, and Others), and Region (North America, Europe, Asia-Pacific, Middle East & Africa, and Latin America)—Forecast Till 2030

ID: MRFR/A&D/7032-CR | October 2022 | Region: Global | 168 Pages         

Low Cost Carrier (LCC) Market

Low Cost Carrier (LCC) Market is projected to grow USD 419.72 Billion at a CAGR 16.31% by 2020-2030

Segmentation

By Aircraft Type Wide-body aircraft Narrow-body aircraft
By Distribution Channel Travel agency Online channels
By Operations International Domestic

Key Players

  • EasyJet Airline Company Limited (UK)
  • AirAsiaBerhad (Malaysia)
  • JetBlue Airways Corporation (US)
  • IndiGo (India)
  • Ryanair DAC (Ireland)
  • Norwegian Air Shuttle ASA (Norway)
  • SpiceJet Limited (India)
  • Southwest Airlines Co (US)
  • WestJet Airlines Ltd (Canada)
  • Spirit Airlines Inc(US).

Drivers

  • Increasing Number of Air Travelers
  • Growing Global Travel and Tourism Industry
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Low Cost Carrier (LCC) Market Overview


The Global Low-Cost Carrier (LCC) Market Size Anticipated to Reach At USD 1534.76 Billion In 2021 And Is Expected To Reach USD 419.72 Billion By 2030, With A CAGR Rate Of 8.96% By 2020–2030.


Low cost carriers (LCCs) are carriers which, through a variety of operational processes, have achieved a cost advantage over full-service carriers (FSCs). These LCC airlines translate cost savings into lower, more affordable fares for air travelers.


The global low cost carrier (LCC) market has witnessed high growth in the recent years owing to increasing preference for LCCs over FSCs in the developing countries. Moreover, high aircraft utilization, internet booking, use of secondary airports, lower wage scales, minimum cabin crew, lower rates of unionization among employees, one class of seating, and short ground turn-around times are some factors driving the growth of the market.


This study on the global Low Cost Carrier (LCC) market provides detailed information on industry trends, market dynamics, market size, competitive landscape, and growth opportunities. This research report categorizes the global Low Cost Carrier (LCC) market by aircraft type, operation, purpose, distribution channel, and region/country.


Based on aircraft type, the Low Cost Carrier (LCC) market has been divided into Narrow-Body and Wide-Body. The Narrow-Body segment dominated the market in 2021 and is estimated to remain the same during the review period, whereas it also expected to register the highest CAGR during the forecast period from 2022 to 2030.


COVID-19 Analysis


The pandemic situation raised due to the outbreak of novel coronavirus has drastically changed the working cultures of many industry applications. Due to the COVID-19 pandemic, worldwide commercial airlines generated a revenue of USD 372 million in 2021, which is 55.6% lower as compared to 2020. Air transportation also plays an important role in tourism by contributing to the economic growth, especially in developing countries. The scheduled passenger numbers increased from 4.5 billion in 2019 to 4.7 billion in 2020 worldwide while the number of departures reached 41.2 million in 2020, positively influencing the low-cost carrier (LCC) market.


In 2020, the total international scheduled passenger traffic reached 9.11 billion revenue passenger-kilometers performed (RPK), of which around 26.8% market share was held by Europe alone. The region shows a significant demand for aero structure products owing to the presence of large aircraft fleets. Moreover, the presence of a well-established aero structures manufacturing industry in Europe is likely to drive the demand for low-cost carrier (LCC) market.


Market Dynamics


The global low-cost carrier (LCC) market is expected to witness moderate growth over the forecast period. Low-Cost Carrier (LCC) growing demand for air travel, government initiatives to boost regional connectivity and increasing prominence of low-cost carrier (LCC) in Latin America is propelling the market growth. Additionally, the increasing commercial aircraft production and increasing aircraft deliverables in Asia-Pacific region is likely to create new opportunities in the market.  However, high composites material cost and adverse impact of pandemic may restrict the market growth.


Drivers



  • Growing demand for air travel around the world


The expansion of the aviation industry in the MEA is attributed to its unique geographical position in the world. Eight hours of flying time to the Middle East allow carriers to reach 80% of the population in the world, aggregating the traffic and allowing one-stop service in carrier routes. The government investments in various infrastructure projects for tourists and for the tourists in this region are expanding market growth during the study time frame. Most tourists visiting this region are from Europe and North America. Furthermore, the presence of prominent infrastructures including the tallest towers, biggest shopping malls, islands, and luxurious services in this region is influencing the aircraft industry, attracting more tourists to the Middle East region.


Airline companies in India are planning to add new aircraft to their fleet to capture the increasing domestic passenger traffic. The IATA announced that the domestic market in India posted the fastest full-year domestic growth rate of an 18.6% annual demand. In March 2018, Jet Airways agreed to buy.75 new Boeing 737 MAX planes. Vistara is also planning to buy 60 more aircraft followed by 450 aircraft by Indigo.


Opportunity



  • Increasing aircraft deliverables in Asia-Pacific


Rising disposable income along with regional economic development is significantly contributing to the growing air passenger traffic across the region. Increasing deployment of new generation aircraft replacing the aging fleet will further expand the aerospace & defense market growth over the forecast timeframe. Several airline operators in the region are offering discounts on air tickets to attract customers. For instance, in September 2018, GoAir, AirAsia India, and indigo announced several seasonal discount schemes in India. The availability of low-cost travel alternatives and proliferating low-cost carriers are further boosting the regional demand.


The expansion of production facilities will leverage increased aircraft deliveries over the study timeframe. For instance, in December 2018, Boeing delivered its first 737 MAX airliner to Air China. The expansion of regional air connectivity and the emergence of new air routes are positively influencing the industry demand. For instance, in February 2019, Japan Airlines launched its new flights between Tokyo Haneda (HND) and Manila utilizing Boeing 737-800, further expanding the regional connection.


Market Segmentation


The Low Cost Carrier (LCC) Market has been segmented based on Aircraft Type, Operations, Purpose, Distribution Channel, and region.


Based on Aircraft Type, the global Low Cost Carrier (LCC) market has been segmented into Narrow-Body and Wide-Body.


By Operations, the Low Cost Carrier (LCC) market has been segmented into Domestic and International.


Based on Purpose, the Low Cost Carrier (LCC) market has been segmented into Leisure Travel, VFR, Business Travel, Others.


By Distribution Channel, the Low Cost Carrier (LCC) market has been segmented into Online, Travel Agency, and Others.


Regional Analysis


Globally, the Low Cost Carrier (LCC) market has been categorized into five different regions—North America, Europe, Asia-Pacific, Middle East & Africa, and Latin America. Europe accounted for the largest market share, with a market value of USD 50,078.79 Million in 2020; it is expected to register a CAGR of 8.79% during the forecast period. Latin America was the second-largest market in 2020, valued at USD 45,280.61 Million; it is projected to register CAGR of 9.57%. The presence of multiple aircraft manufacturers across the region including Daher, Stelia Aerospace, and Latecoere are primarily contributing to the Europe low-cost carrier (LCC) market growth over the study timeframe.


The increasing prominence of low-cost carriers along with the expanding regional connectivity will support the regional growth over the forecast timeframe. The increasing air traffic coupled with higher airline frequencies is propelling the demand for new aircraft across the region. Additionally, the proliferating MRO services will play a major role in the industry expansion over the study timeframe. Manufacturers are also emphasizing on expanding their production facilities to meet their previous order backlogs. For instance, in June 2018, Airbus inaugurated its fourth production line to manufacture the A320 product line-up in Hamburg, Germany. This strategy enabled the company to ramp up the production of its single-aisle aircraft to 60 per month until mid-2019.


The Latin America low-cost carrier (LCC) market is driven by the proliferating airliners across the region. Additionally, airliners are significantly expanding their airline routes and focusing on providing convenience to customers, thus boosting their market shares. Aircraft manufacturers are entering the region to improve their sales and support their geographical expansion, thus boosting their market shares. For instance, in November 2019, Lockheed Martin expanded its sales network in Latin America with a new sales office in Chile


GLOBAL LOW COST CARRIER (LCC) MARKET, BY REGION, 2021 (% SHARE)
LOW COST CARRIER (LCC) MARKET, BY REGION, 2021 (% SHARE)
Source: Industry Expert, Secondary Research, and MRFR Analysis


North America Region to Bolster the Low Cost Carrier (LCC) Market


The region is expected to showcase the fastest growth trend owing to the presence of major aircraft manufacturers in the region. Several manufactures including Boeing, Lockheed Martin, and United Technologies are continuously investing in the R&D of advanced aircraft. Industry participants are continuously engaged in strategic collaborations and partnerships to supply aero structures & aircraft components to support their aircraft production. Furthermore, in February 2020, the acquisition of Bombardier by Airbus and the Government of Québec is expected to drive the regional jets business expansion in North America.


Competitive Landscape


The global market for Low Cost Carrier (LCC) has witnessed significant growth over the forecast period due to the growing digital technology. There are several domestic, regional, and global players operating in the Low Cost Carrier (LCC) market who continuously strive to gain a significant share of the overall market. During the study, MRFR has analyzed some of the major players in the global Low Cost Carrier (LCC) market who have contributed to the market growth. These include AirAsia Berhad, EasyJet plc, IndiGo, JetBlue Airways Corporation, Norwegian Air Shuttle ASA, Ryanair DAC, Ryanair DAC, SpiceJet Limited, Spirit Airlines, Inc., WestJet Airlines Ltd, Alaska Air Group, Inc, Azul S.A, Air Arabia PJSC, Jetstar Airways Pty Ltd, Eurowings, Scoot, PAL Express, and Flynas.


During the study, MRFR has analyzed some of the major players in the global Low Cost Carrier (LCC) market who have contributed to the global market growth.


Key Players



  • Southwest Airlines Co.

  • JetBlue Airways Corp.

  • Spirit Airlines, Inc


Recent Developments


In May 2022, Southwest Airlines will spend $2 billion upgrading its passenger experience. Key improvements include enhanced WiFi and power ports at each seat on all new aircraft deliveries.


In April 2022, The Jetstar Group and IndiGo made a new Low-Cost Carrier (LCC) interline partnership that enables Jetstar customers to book connections and flights on indigo services through its Jetstar Connect platform.


In February 2022 JetBlue had announced an agreement to exercise its option to add 30 additional Airbus A220-300 aircraft to its order book, bringing the total number of A220s in the airline’s fleet and on order to 100. The aircraft’s strong economics and operational performance are a key to JetBlue’s long-term cost performance, while also enabling more sustainable flying, greater flexibility to support JetBlue’s network strategy, and the introduction of its all-new onboard experience to more customers.


In August 2021 JetBlue Airways Corp started transatlantic flights between New York and London, planning to grab market share with low fares and drive recovery on what is usually one of the world's busiest and most lucrative international routes.


Report Overview


This study estimates revenue growth at global, regional, and country levels and offers an overview of the latest developments in each of the sub-sectors from 2018 to 2030. For this analysis, MRFR segmented the global Low Cost Carrier (LCC) Market report based on aircraft type, operation, purpose, distribution channel, and region.


By Aircraft Type



  • Narrow-Body

  • Wide-Body


By Operations



  • Domestic

  • International


By Purpose



  • Leisure Travel

  • VFR

  • Business Travel

  • Others


By Distribution Channel



  • Online

  • Travel Agency

  • Others



Report Scope:

Report Attribute/Metric Details
  Market Size   2021: USD 1,53,476.05 Million 2030: USD 3,31,011.31 Million
  CAGR   8.96%
  Base Year    2021
  Forecast Period    2022–2030
  Historical Data    2018-2020
  Forecast Units    Value (USD Million)
  Report Coverage    Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
  Segments Covered   Distribution Channel, Purpose, Operations, Aircraft Type
  Geographies Covered    North America ,Europe, Asia-Pacific,South America, Middle East ,Africa
  Key Vendors   • AirAsia Berhad • EasyJet plc • IndiGo • JetBlue Airways Corporation • Norwegian Air Shuttle ASA • Ryanair DAC • Ryanair DAC • SpiceJet Limited • Spirit Airlines, Inc. • WestJet Airlines Ltd • Alaska Air Group, Inc • Azul S.A • Air Arabia PJSC • Jetstar Airways Pty Ltd • Eurowings • Scoot • PAL Express • Flynas
  Key Market Opportunities   • Increasing aircraft deliverables in Asia-Pacific • Increasing commercial aircraft production • Impact of COVID-19 • Impact on industry • Impact on tech spending in the industry • Impact on market players
  Key Market Drivers   • Growing demand for air travel around the world • Government initiatives to boost regional connectivity • Increasing prominence of low-cost carrier (LCC) in Latin America


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Frequently Asked Questions (FAQ) :

The Europe regional market is projected to be the major driver of the market.

The key contenders in the market are AirAsia Berhad, EasyJet plc, IndiGo, JetBlue Airways Corporation, Norwegian Air Shuttle ASA, Ryanair DAC, Ryanair DAC, SpiceJet Limited, Spirit Airlines, Inc., WestJet Airlines Ltd, Alaska Air Group, Inc, Azul S.A, Air Arabia PJSC, Jetstar Airways Pty Ltd, Eurowings, Scoot, PAL Express, and Flynas.

The rise in need for robust supply chain can promote the Low Cost Carrier (LCC) market.

High cost of crude oil can restrains the Low Cost Carrier (LCC) market expansion.