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| ✷ Report Code: A04211 | Aug 2022 | Pages: 233 | ||
| Tables: 161 | Charts: 65 |
| |
The global low cost airlines market was valued at $155.02 billion in 2016, and is projected to reach $440.46 billion by 2030, growing at a CAGR of 10.4% from 2022 to 2030.
Low-cost airline is a passenger carrier, which offers travelling service at relatively affordable and competitive rates as compared to other airlines (full service or traditional airline). Some of the popular low-cost airlines include Ryanair, EasyJet, Air Asia, and Qantas Airways. The feasibility of the operation of low-cost airlines is attributed to its low-cost model. This low-cost model can include characteristics such as low pricing strategy, simple pricing structure, involves online & direct ticket booking (eliminating extra ground staff & vendors), preference to secondary airport, point-to-point network, single class seating arrangement, ticket fare may not include extra services (food & beverage), intensive aircraft usage, short turnaround time, dense seating arrangements, and secondary revenue sources (advertisement and onboard selling).
Low-cost airlines have grown exponentially worldwide over the past few years, owing to 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. Moreover, increase in purchasing power of middle-class households, especially in developing regions, and high internet penetration coupled with e-literacy notably contribute toward the growth of the global low-cost airlines market. However, factors such as volatile crude oil prices and increase in terrorism & crime rate, political uncertainty, & natural calamities hinder the market growth. Furthermore, increase in cases of COVID-19 is leading to travel restrictions, which is severely affecting the market.
Improvement in economic condition and surge in disposable income are significant factors that propel the growth of low-cost airlines market. After the 2009 economic crisis in Europe and the economic crisis in China, the world economy witnessed a standstill. However, strong recovery from the crisis resulted in notable economic growth, especially in developing economies, and has led to increase in disposable income among the middle-income groups. In addition, disposable income of individuals in Asia-Pacific has witnessed a high growth rate, thus acting as a major driver for the market.
Moreover, transportation through airlines provides a significant support to the economic development. Current trend of increasing connectivity of major cities of high economic activity enables the transfer of goods, people, capital, technology, and ideas. Moreover, the price to consumers of air transport, meanwhile, continues to fall, after adjusting for inflation, owing to the introduction of low-cost airlines and highly competitive rivalry among the airlines.
The target of terrorists has shifted toward international tourists and visitors. Some of these infamous incidents include the Luxor massacre, November 1997; 9/11 at World Trade Center; and 26/11 Mumbai attacks. These incidents have severely affected the travel & tourism industry, thus hampering the market growth. Surge in number of crime rates such as kidnaping, pickpocket, and robbery has led to instability in various destinations. For instance, Afghanistan the invasion of Taliban in this region has reduced the no of passengers due to fear of torture or persecution. Another factor notably affecting tourism is natural disasters such as Indian Ocean earthquake and tsunami, 2004; Tohoku Earthquake and Tsunami, 2011; Hurricane Sandy, 2012; Hurricane Odile, 2014; Chennai Floods, 2015; ,2016 Kaikoura earthquake and China flood, 2020. These disasters significantly affected the infrastructure, lives, and economy & several industries, including airline industry and low-cost airlines market.
The low cost airlines market is segmented into Distribution Channel, Purpose and Destination.
The global low-cost airlines market is segmented into purpose, destination, distribution channel, and region. By purpose, the market is segregated into leisure travel, visiting friends & relatives (VFR), and business travel. Depending on destination, it is bifurcated into domestic and international. On the basis of distribution channel, it is garmented into online and travel agency. The market has been further analyzed across North America (U.S., Canada, and Mexico), Europe (UK, Italy, Spain, Germany, France, Latvia, and rest of Europe), Asia-Pacific (Philippines, Indonesia, Thailand, Singapore, Malaysia, Vietnam, China, India, Australia, and rest of AsiaPacific), and LAMEA (Latin America, Africa, and Middle East).
The major companies profiled in the low cost airlines market size include Air Arabia PJSC, AirAsia Group Berhad, Alaska Air Group, Inc., Azul S.A., easyjet Plc, New World Aviation, Inc., Norwegian Air Shuttle ASA, Qantas Airways Limited, Ryanair Holdings Plc., and Westjet Airlines Ltd.
Depending on distribution channel, the low-cost airlines market is categorized into online, travel agency, and others. The online segment accounted for the highest low cost airlines market share, and is exacted to continue this trend throughout the low cost airlines market forecast period.
Depending on purpose, the low-cost airlines market is categorized into leisure travel, VFR, business travel, and others. Leisure travel was the largest segment in 2021, and is expected to continue the trend throughout the forecast. Business travel is expected to garner high growth rate throughout the forecast.
On the basis of destination, the low-cost airlines market is categorized into domestic and international. The domestic segment exhibited the highest growth, and is expected to continue the same trend throughout the forecast period. On the contrary, the international segment is expected to register the highest growth rate throughout the forecast.
The low-cost airlines market depending on the region is studied across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific was the largest market, and is expected to be the fastest growing regional market with a CAGR of 12.0% throughout the forecast period.
Low Cost Airlines Market Report Highlights
| Aspects | Details |
|---|---|
| By Distribution Channel |
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| By Purpose |
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| By Destination |
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| By Region |
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| Key Market Players | Azul S.A., easyJet plc, AirAsia Group Berhad, New World Aviation, Inc., Ryanair Holdings Plc, Qantas Airways Limited, Air Arabia PJSC, Alaska Air Group, Inc., Norwegian Air Shuttle ASA, WestJet Airlines Ltd. |
The low-cost airlines market holds a substantial scope for growth. The lowcost airlines industry has witnessed steady growth even under several turbulences such as global uncertainty, weakened global economy, terrorist attacks, cyclones, tsunamis, and volatile crude oil price. The CXOs further added that the low-cost airline segment is anticipated to witness strong growth, owing to economic growth and increase in trend of domestic and global leisure travel. In addition, increase in competition among airlines and relaxation on travel and immigration restrictions in several regions foster the market growth. Moreover, surge in penetration of mobile devices and accessibility of the internet have changed travelers’ experience & expectation from service providers across the entire industry. Technology has enabled guests to book their travel with high control and share their travel experiences with prospecting travelers.
A. The global low-cost airlines market was valued at $123,180.6 million in 2021 and is projected to reach $440,463.8 million by 2030, registering a CAGR of 10.4% from 2022 to 2030.
A. The forecast period in the market report would be 2022-2030.
A. The market value of low cost airlines market in 2021 is $123,180.6 million.
A. The year 2021 is base year calculated in the low cost airlines market report.
A. The low cost airlines market market is supported by the growth of multinational companies and their international movements for their business perspective.
A. The major companies profiled in the report include Air Arabia PJSC, AirAsia Group Berhad, Alaska Air Group, Inc., Azul S.A., easyjet Plc, New World Aviation, Inc., Norwegian Air Shuttle ASA, Qantas Airways Limited, Ryanair Holdings Plc., and Westjet Airlines Ltd.
A. The outbreak of the novel coronavirus has substantially affected the growth of the low-cost airlines market throughout the globe. This decline in growth of the low-cost airlines market is majorly attributed to the active lockdown and social distancing being practiced all around the world combined with travel restrictions.
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