Low Cost Airline Market to Expand at a CAGR 8.8% Due to Growing Leisure Travel and Business Travel Globally
Pune, Maharashtra, November 12, 2019 (Wired Release) Prudour Pvt. Ltd. The Global Low Cost Airline Market was valued at US$ 197760.0 Mn in 2018 to reach US$ 458728.6 Mn by 2028 at a CAGR of 8.8%.
Low Cost airlines are passenger airlines offering travelling service tickets at a comparatively cheaper rate than full service or traditional airlines. Low Cost airlines are also known as prizefighters, Low Cost carriers (LCC), frills airlines, budget airlines and discount airlines. During the 1970’s, the American domestic carrier – Southwest introduced the concept of Low Cost airlines with the sole objective of providing discounted airfares to consumers. The basis of operation of Low Cost airlines remains the same, which is to offer most economical prices to the consumer by undercutting price levels of flagship carriers.
The operational feasibility of Low Cost airlines is attributed to its Low Cost model. The Low Cost model is a ‘modified’ version of the Southwest Low Cost model of operation. The model includes a Low Cost leadership position strategy. The goal of this strategy is to create a sustainable cost advantage over the competition. Currently, there are several airlines competing with each other, resulting in airline companies modifying their strategy to stand out in the competition. The strategy is called a differentiation strategy, in which a company offers differentiated products that the customer values, thus increasing the market share of the company. In mature markets, such as the U.S., differentiation strategy is highly evident, wherein the operators have struck a balance between the service model and Low Cost model, to derive maximum margins.
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The idea behind Low Cost airlines revolves around cutting cost to give low price product with bare essentials to consumers. Nowadays, Low Cost airlines are adopting several ways to tackle this opportunity, which includes simple pricing structure, pricing strategy, online and direct ticket booking, point-to-point network, preference to secondary airport, single class seating arrangement, intensive aircraft usage, dense seating arrangements and others, in order to gain a competitive edge over its peers.
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Global Low Cost Airline Market Revenue (US$ Mn), 2018–2028
Significant rise in the disposable income of individuals and growth in the income of the middle class, particularly in developing economies, is a key factor responsible for the growth of the Global Low Cost Airlines Market.
Increasing preference towards air travel, owing to ease of travel, urbanization and changing the lifestyle of consumers is a factor expected to fuel the growth of Global Low Cost Airlines Market.
High investment in airlines but low profitability is another challenge for vendors operating in this market. Major companies have reduced their flight charges to acquire a large customer base. However, these companies incur low margins, which makes it difficult to sustain in the market for a longer term.
Global Low Cost Airline Market by Product Type, 2018
Global Low Cost Airlines Market is segmented on the basis of product type, application and region. The international segment is estimated to be the most lucrative segment, under the product type, in Global Low Cost Airlines Market.
On the basis of region, the market is segmented into North America, South America, Europe, Japan, China, Southeast Asia, India, MEA and the rest of the world. Europe accounts for the majority share in the Global Low Cost Airlines Market, followed by China.
The research report on the global Low Cost airline market includes profiles of some of major companies such as AirAsia Group Berhad, Norwegian Air Shuttle ASA, easyJet plc, Ryanair Holdings plc, Alaska Air Group, Inc., WestJet Airlines Ltd., Qantas Airways, International Consolidated Airlines Group, S.A., Go Airlines (India) Ltd., GOL Linhas Aéreas Inteligentes S.A., SpiceJet Limited, Dubai Aviation Corporation, JetBlue Airways Corporation, Air Arabia PJSC, Southwest Airlines Co. etc.
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