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Low Cost Carrier Market Trends

ID: MRFR//7032-CR | 168 Pages | Author: Sejal Akre| October 2022

Global Low-Cost Carrier (LCC) Market Overview

Low-Cost Carrier (LCC) Market Size was valued at USD 174.6826 billion in 2023. The Low-Cost Carrier (LCC) Market industry is projected to grow from USD 203.1558638 Billion in 2024 to USD 679.934503191597 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 16.30% during the forecast period (2024 - 2030). Increasing demand for air travel also Government initiatives to boost regional connectivity are the key market drivers enhancing the market growth.

Low-Cost Carrier (LCC) Market

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Low-Cost Carrier (LCC) Market Trends

  • Increasing demand for air travel is to boost market growth

The MEA's unique geographic location in the world has contributed to the growth of the aviation industry there. Carriers can reach 80% of the world's population with eight hours of flight time to the Middle East, aggregating traffic and enabling one-stop service on carrier routes. During the study period, market growth is being accelerated by government investments in a range of tourism-related infrastructure projects. Travelers from North America and Europe make up the majority of visitors to this area. The Middle East region also benefits from notable infrastructures such as the tallest towers, the largest shopping malls, islands, and abundant services, influencing the aircraft industry and drawing more tourists there.

Indian airline companies intend to expand their fleet with new planes to handle the rising domestic passenger volume. The Indian domestic market, with a demand growth of 18.6% annually, had the fastest full-year domestic growth rate, according to the IATA. Jet Airways and I agreed to buy in March 2018. 75 fresh Boeing 737 MAX aircraft. In addition, Vistara intends to purchase 60 additional planes. Indigo will then purchase 450 planes.

Additionally, growing regional air passenger traffic is largely attributed to rising disposable income and regional economic growth. The aerospace and defense market will continue to grow over the anticipated timeframe due to the increasing deployment of new-generation aircraft to replace the fleet that is getting older. To draw customers, several regional airline operators are providing discounts on airline tickets has enhanced the Low-Cost Carrier (LCC) Market CAGR ly in recent years.

Low-Cost Carrier (LCC) Market Segment Insights

Low-Cost Carrier (LCC) Aircraft Type Insights

The Low-Cost Carrier (LCC) Market segmentation, based on aircraft type, includes narrow-body and wide-body. The narrow-body segment held the majority share in 2022 concerning the Low-Cost Carrier (LCC) Market revenue. Increased use of narrow-body aircraft by airlines is to blame for the increase. These planes have smaller running costs than wide-body planes, and in this business model, keeping operating costs down is the most critical aspect. These factors give rise to the narrow-body segment in the Low-Cost Carrier (LCC) Market through the forecast period.

Figure 2:  Low-Cost Carrier (LCC) Market by Aircraft Type, 2022 & 2030 (USD billion)Low-Cost Carrier (LCC) Market by Aircraft Type, 2022 & 2030Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Low-Cost Carrier (LCC) Distribution Channels Insights

The Low-Cost Carrier (LCC) Market segmentation, based on distribution channels, includes Online and Travel agencies. The online segment dominated the market in 2022 and is projected to be the faster-growing segment during the forecast period, 2022-2030. This is attributed to an increase in the use of online marketplaces for making flight reservations, which save time and money while still offering all relevant flight information and being simple to use. By 2022, the Asia-Pacific region is expected to have the fastest-growing online travel market share, with a value of USD 1,091 billion. The high penetration of online transactions aids the development of a low-cost LCC model. The fast adoption of online shopping has aided labor management and eliminated the need for middlemen in payments, positively impacting the market growth.

Low-Cost Carrier (LCC) Operations Insights

The Low-Cost Carrier (LCC) Market data has been bifurcated by surgery into domestic and international. The domestic segment dominated the market in 2022 and is projected to be the faster-growing segment during the forecast period, 2022-2030. The rise is driven by an increase in domestic air travelers and airports in developed nations, which is positively impacting the market growth for Low-Cost Carrier (LCC).

Low-Cost Carrier (LCC) Regional Insights

By Region, the study provides market insights for Low-Cost Carrier (LCC) into North America, Europe, Asia-Pacific and the Rest of the World. North America Low-Cost Carrier (LCC) Market accounted for USD 0.88 billion in 2022 and is expected to exhibit a significant CAGR growth during the study period. This is attributed to the growing number of airlines focusing on offering customers convenience and significantly expanding their airline routes, which is helping them gain market share. By expanding geographically and increasing sales, aircraft manufacturers are moving into the area to increase market shares. For instance, Lockheed Martin expanded its North American sales network.

Further, the major countries studied in the market report for Low-Cost Carrier (LCC) are The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3:  LOW-COST CARRIER (LCC) MARKET SHARE BY REGION 2022 (%)LOW-COST CARRIER (LCC) MARKET SHARE BY REGION 2022Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe's Low-Cost Carrier (LCC) Market accounts for the second-largest market share. Over the anticipated timeframe, the prominence of low-cost carrier (LCC) will grow, and regional connectivity will also expand. Rising airline frequencies and air traffic drive the region's demand for new aircraft. Additionally, the mushrooming MRO services will significantly influence the industry's growth throughout the study. Expanding their production facilities is another priority for manufacturers as they try to catch up on their backlog of previous orders. To produce the A320 product line, for instance, Airbus opened its fourth production line in Hamburg, Germany, in June 2018. Until the middle of 2019, the company increased production of its single-aisle aircraft by 60 per month thanks to this strategy. Further, the Germany Low-Cost Carrier (LCC) Market held the largest market share, and the UK Low-Cost Carrier (LCC) Market was the fastest-growing market in the European region.

The Asia-Pacific Low-Cost Carrier (LCC) Market is expected to grow at the fastest CAGR from 2022 to 2030. This is because increased aircraft deliveries over the study timeframe will be facilitated by expanding production facilities. For instance, Air China received the first Boeing 737 MAX airliner in December 2018. The growth of regional air connectivity and the opening new air routes are favorably impacting market demand. For instance, to strengthen the regional connection, Japan Airlines began operating new flights in February 2019 between Tokyo Haneda (HND) and Manila using the Boeing 737-800. Moreover, China Low-Cost Carrier (LCC) Market held the largest market share, and the India Low-Cost Carrier (LCC) Market was the fastest-growing market in the Asia-Pacific region

Low-Cost Carrier (LCC) Key Market Players & Competitive Insights

Major market players are spending much money on R&D to increase their product lines, which will help the Low-Cost Carrier (LCC) Market grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the Low-Cost Carrier (LCC) industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies manufacturers adopt in the Low-Cost Carrier (LCC) industry to benefit clients and expand the market sector is manufacturing locally to reduce operating costs. In recent years, Low-Cost Carrier (LCC) industry has provided medicine with some of the most significant benefits. In the Low-Cost Carrier (LCC) Market, major players such as EasyJet Airline Company Limited (UK), AirAsia Berhad (Malaysia), JetBlue Airways Corporation (US), IndiGo (India), Ryanair DAC (Ireland), Norwegian Air Shuttle ASA (Norway), and others, are working on expanding the market demand by investing in research and development activities.

EasyJet Airline Company Limited (UK) has established itself as the top short-haul airline in Europe over the past 25 years. We have a solid foundation from which to continue our upward trajectory. More than any other airline, we connect passengers from over 30 countries via more than 100 of Europe's most popular routes. EasyJet has a robust network of first- and second-place spots in major airports that have proven to be among the highest-yielding in the industry. This makes it easy for easyJet to make effective network decisions focusing on maximizing returns. To ensure that capacity is deployed in the markets with the highest demand and returns, easyJet continues to optimize its network.

Also, SpiceJet Limited (India) The goal of SpiceJet is to become the most popular low-cost carrier (LCC) in India by providing price-conscious customers with the lowest airfares and the best customer value. We want to make everyone's dream of flying come true! India's economy and business are expanding, causing a rise in the population's propensity to travel. Everybody needs to save time and money when traveling, as more and more Indians do so for both business and pleasure. The goal of SpiceJet is to resolve this and make flying accessible to all people. SpiceJet provides reasonable fares and is significantly less expensive than most airlines, thanks to a dynamic fare structure.

Key Companies in the Low-Cost Carrier (LCC) Market include

  • 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).

Low-Cost Carrier (LCC) Industry Developments

For instance,May 2022 Southwest Airlines plans to invest $2 billion in improving the traveler experience. There are significant upgrades on all new aircraft deliveries, such as improved WiFi and power outlets at each seat.

For instance,April 2022 The Jetstar Group and IndiGo announced a new Low-Cost Carrier (LCC) interline partnership in April 2022. As a result, Jetstar customers will now be able to book connections and flights on Indigo services through the Jetstar Connect platform.

Low-Cost Carrier (LCC) Market Segmentation

Low-Cost Carrier (LCC) By Aircraft Type Outlook

  • Wide-body aircraft

  • Narrow-body aircraft

Low-Cost Carrier (LCC) By Distribution Channel Outlook

  • Travel agency

  • Online channels

Low-Cost Carrier (LCC) By Operations Outlook

  • International

  • Domestic

Low-Cost Carrier (LCC)  Regional Outlook

  • North America

    • US

    • Canada

  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Rest of Europe

  • Asia-Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Australia

    • Rest of Asia-Pacific

  • Rest of the World

    • Middle East

    • Africa

    • Latin America

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