(MENAFN- GlobeNewsWire - Nasdaq) The growth of the low-cost airlines market is driven by increase in urbanization in emerging economies, rise in consumer preference for budget travel, strategic expansion into underserved markets, advancements in fuel-efficient aircraft technology, and the ability to offer competitive pricing through direct distribution channels. These factors collectively contribute to the sector's expansion, catering to a growing segment of cost-conscious travelers seeking affordable and accessible air travel options globally.Wilmington, New Castle, July 30, 2024 (GLOBE NEWSWIRE) -- Allied Market Research published a report, titled, " Low Cost Airlines Market by Purpose (Leisure Travel and Visiting Friends & Relatives (VFR), Business Travel), and Destination (Domestic and International): Global Opportunity Analysis and Industry Forecast, 2024-2034" . According to the report, the low cost airlines market was valued at $298.0 billion in 2023, and is estimated to reach $543.1 billion by 2034, growing at a CAGR of 5.7% from 2024 to 2034.
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Prime determinants of growth
The growth of the low-cost airlines market is driven by several major factors that cater specifically to evolving consumer preferences and market dynamics. Advancements in aircraft technology and operational efficiencies enable low-cost airlines to offer competitive pricing while maintaining profitability. These efficiencies are crucial in a highly price-sensitive market where cost-effective operations translate directly into affordable fares. Expanding middle-class populations in emerging economies such as India, China, and Southeast Asia fuel increased demand for air travel, especially among budget-conscious travelers seeking economical options. In addition, the strategic expansion of route networks to include secondary and tertiary cities enhances accessibility and broadens customer reach within the low-cost airlines market. Moreover, innovative marketing strategies and the widespread adoption of digital platforms facilitate direct customer engagement and efficient distribution channels, further boosting the growth of the low-cost airlines market. Furthermore, partnerships with tourism boards, travel agencies, and hospitality sectors contribute to seamless travel experiences, which has helped attract a broader customer base and sustain market expansion for low-cost airlines market globally.
Report coverage & details:
| Report Coverage | Details |
Forecast Period | 2024–2034 |
| Base Year | 2023 |
| Market Size In 2023 | $298.0 Billion |
| Market Size In 2034 | $543.1 Million |
| CAGR | 5.7% |
| No. Of Pages In Report | 288 |
| Segments Covered | Purpose, Destination, Distribution Channel, And Region. |
| Drivers |
Increase In Demand For Affordable Air Travel Expansion Of Middle-Class Population In Emerging Markets Growth In Tourism And Travel Activities Improved Connectivity And Expansion Of Routes |
| Opportunities |
Expansion Into Untapped Markets Technological Advancements In Aircraft And Operations Strategic Partnerships And Alliances Customization And Enhancement Of Ancillary Services |
| Restraint |
Volatility In Fuel Prices Intense Competition And Price Wars |
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The leisure travel segment held the highest market share in 2023
Based on purpose, the leisure travel segment held the highest market share in 2023. Leisure travel holds the majority share in the low-cost airlines market primarily owing to the affordability and value-driven services these carriers offer. Budget-conscious travelers, including families, tourists, and young adventurers, are attracted to the low fares and frequent promotional deals provided by low-cost airlines. In addition, the rise in disposable incomes and surge in interest in exploring new destinations contribute to this trend. The ability to travel frequently and to a wider range of destinations without significant financial burden makes low-cost airlines the preferred choice for leisure travelers, driving the dominance of the segment in the market.
The domestic segment held the highest market share in 2023
Based on destination, the domestic segment held the highest market share in 2023. Shorter distances and high frequency of domestic flights align well with the cost-effective and efficient operational models of low-cost carriers. In addition, there is significant demand for affordable travel options within countries, driven by business, tourism, and family visits. The lower operational costs associated with domestic flights, such as reduced fuel consumption and simplified regulatory requirements, further support the viability of low-cost operations. Moreover, extensive network of smaller regional airports enables low-cost carriers to connect to numerous domestic destinations, which has made air travel more accessible and convenient for a broader population. The combination of high demand, operational efficiency, and extensive connectivity strengthens the share of domestic segment in the low-cost airline market.
The online segment held the highest market share in 2023
Based on distribution channel, the online segment held the highest market share in 2023 owing to their convenience, accessibility, and cost-effectiveness. Customers increasingly prefer booking flights online due to the ease of comparing fares, checking schedules, and managing bookings from anywhere with internet access. Low-cost airlines (LCAs) leverage online platforms to directly reach their target audience, bypassing traditional distribution channels and reducing distribution costs. Moreover, online platforms enable LCAs to implement dynamic pricing strategies and personalized marketing campaigns, enhancing customer engagement and loyalty. Airlines also benefit from data analytics and customer insights gathered through online bookings, allowing for better decision-making and service customization. As digital adoption continues to grow globally, online channels are crucial for low-cost airlines to maintain competitive pricing, operational efficiency, and a strong market presence in the highly competitive aviation industry.
Asia-Pacific held the highest market share in terms of revenue in 2023
Based on region, Asia-Pacific held the highest market share in terms of revenue in 2023. The region benefits from a vast population with a rise in the middle class that increasingly seeks affordable travel options. Countries such as China, India, and Southeast Asian nations have witnessed rapid economic growth, which has driven higher disposable incomes and boost in air travel demand. Moreover, the diverse geography of Asia-Pacific with numerous densely populated cities creates strong demand for short-haul flights, which are well-suited for low-cost airlines. Supportive government policies in many countries have encouraged the growth of the low cost airlines by promoting competition and reducing regulatory barriers. The presence of established low-cost airlines such as AirAsia, IndiGo, and Lion Air further strengthens the dominance of Asia-Pacific in the global low-cost airlines market, which has made it an essential travel option for budget-conscious travelers across Asia-Pacific.
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Players: -
Norwegian Air Shuttle ASA
The report provides a detailed analysis of these key players in the global low cost airlines market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.
Recent Industry Dev
In June 2023, SkyUp Airlines LLC has planned to operate charter flights to the U.S. with a fleet of single-aisle Boeing 737s after the U.S. Department of Transportation granted the airline a license to operate foreign air freight with a new simplified process.
In May 2023, Scoot completed an agreement to use Embraer's E190-E2 to expand its fleet as the low-cost airline seeks to strengthen its presence in Southeast Asia.
In May 2023, Boeing and Ryanair announced an agreement for the low-cost airlines, with an order for up to 300 Boeing 737 Max 10s to strengthen their presence in the global market.
In February 2023, Air India Ltd. has signed a contract with Airbus SE and Boeing to procure jetliners and increase its portfolio of jetliners.
In October 2022, Indigo India, has planned four new domestic routes to expand its extensive network in India, which now includes 74 destinations. From October 30, 2023, the airline has launched 2 routes, 4 times/week between Ahmedabad (AMD) and Jammu (IXJ) and between Ranchi (IXR) and Bhubaneshwar (BBI) .
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