Global Low Cost Airlines Market to Reach $315.4 Billion by 2028
16-10-23
The global low cost airlines market reached a size of $189.1 billion in 2022, and it is anticipated to experience substantial growth in the coming years. Projections indicate that the market will reach $315.4 billion by 2028, exhibiting a robust compound annual growth rate (CAGR) of 8.7% during the period from 2023 to 2028.
Low cost airlines, also known as budget airlines or no-frills carriers, offer affordable air travel options for short-haul flights with fewer amenities compared to conventional full-service airlines. These airlines have adopted several cost-efficient strategies, such as charging separately for services like food, beverages, early boarding, carry-on baggage, and car rental, to generate non-ticket revenues.
They also operate single-type aircraft with minimal equipment to reduce weight, acquisition, and maintenance costs while increasing fuel efficiency. Additionally, low cost airlines often use less congested secondary airports to reduce airport fees, air traffic congestion, delays, and ground time between flights.
Key market trends and drivers:
Rise in Domestic Travel and Tourism: The significant increase in domestic travel and tourism is a key factor driving market growth. Travelers are opting for low cost airlines to explore various domestic destinations affordably.
Direct Booking and Ticketless Travel: Leading airline companies are offering tickets directly through telephone or internet bookings, eliminating the need for third-party agencies. This reduces transaction costs and services fees. The growing adoption of ticketless travel and increased internet penetration are also contributing to market growth.
Point-to-Point Nonstop Flights: Low cost airlines operate point-to-point nonstop flights, reducing travel time and improving aircraft utilization.
Business Travel: Business travelers are increasingly focused on minimizing travel time and costs, which is influencing the market positively.
iscounted Fares: Market players are emphasizing offering discounted fares for early reservations while enhancing passenger connectivity.
COVID-19 Impact: The decline in the number of commercial flights due to the COVID-19 pandemic and related travel restrictions negatively impacted the market. However, the market is expected to rebound as travel restrictions ease.
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