Portland, OR -- (SBWIRE) -- 06/12/2018 -- The low cost airlines market is anticipated to witness disruptive growth, owing to several factors such as large consumer base coupled with rise in disposable income of the middle-income group of population; moreover, increase in e-literacy and penetration of internet, the cost of operations has significantly lower, hence leveraging the feasibility of the low cost airlines market.
The Global Low Cost Airlines Market was valued at $117,726 million in 2016, and is projected to reach $207,816 million in 2023, registering a CAGR of 8.6% from 2017 to 2023, according to the latest report published by Allied Market Research. The development of the travel & tourism sector fosters the growth of the low cost airlines market.
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Low cost airlines are passenger airlines, which offer travelling service tickets at relatively cheaper rate compared to other airlines (full service or traditional airline). Low cost airlines are also known as no frills airlines, prizefighters, low-cost carriers (LCC), discount airlines, and budget airlines. Some of the popular low cost airlines include Ryanair and EasyJet.
The growth of the market is attributed to the rise in economic activity, ease of travel, travel & tourism industry, urbanization, changes in lifestyle, consumers preference for low cost service along with non-stops, and frequent service, increase in purchasing power of middle class households especially in the developing regions, and high internet penetration coupled with e-literacy.
In 2016, the global scheduled airline passenger was estimated to be 3.8 billion, and around 28% of these passengers were carried by low cost airlines. However, the distribution/penetration of low cost airlines is equally distributed. For instance, in Latvia, Europe, around 80% of the passengers are flown by low-cost carriers, whereas, in Africa, nearly half of the countries have no low cost airline service.
Development of the travel and tourism industry drive the market. Moreover, government initiative to increase national & international tourism significantly boost the market growth. In addition, increase in penetration of internet is rapidly changing the dynamic of doing business. Rise in competition within the airline industry is anticipated to further introduce ultra-low cost airline, and the service is also expected to improve to increase brand loyalty.
Key Findings of the Low Cost Airlines Market:
- In 2016, Europe dominated the global market with around 40% share, in terms of value.
- Asia-Pacific is estimated to witness the highest growth rate during the forecast period.
- Leisure travel segment generated the highest revenue to the global market in 2016 and is expected to grow at a CAGR of 8.7%.
- Low cost airlines for international destinations is significantly gaining popularity and growing at a CAGR of 9.4%
- The online distribution channel holds a dominant position and it is anticipated to maintain its lead over the forecast period.
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Key Players:
- Virgin America
- Norwegian Air Shuttle As
- easyJet plc, Jetstar Airways Pty Ltd.
- WestJet Airlines Ltd.
- Indigo
- Azul Linhas Areas Brasileiras S.A. (Azul Brazilian Airlines)
- Air Arabia PJSC.