summary
- Low-cost carriers handle a significant amount of air transport capacity globally, and further growth is expected in this category.
- 29 of the world’s top 103 airlines are low cost carriers, with Southwest Airlines and Ryanair leading the way in ASK.
- LCCs operate one family of aircraft and offer minimal in-flight services to keep prices low.
One-third of the world’s scheduled airline capacity is handled by low-cost carriers (LCCs). As air travel numbers continue to return to normal levels, industry analysts expect further growth in the airline category.
Downtime during the pandemic reportedly allowed some carriers to adapt their strategies and assess the market to determine growth. Several LCCs have also introduced new routes in the past few years, increasing competition from traditional airlines.
How many LCCs are there?
LCCs’ global scheduled seat share from September 2022 to August this year is divided by flight, seat and available seat kilometer (ASK). According to his OAG, an aviation analytics provider, the share is 31% for flights, 35% for seats and 27% for ASK. There are currently over 800 scheduled airlines in the world, with just over 100 designated as LCCs.
Photo: Joe Kunzler | Simple Flight
However, despite the large number of airlines, approximately 80% of all operations measured by ASK are carried out by 103 airlines, or approximately 13% of all scheduled airlines, according to OAG. 29 of his 103 airlines are LCCs, giving him a strong global presence. Dallas-based Southwest Airlines is the world’s largest low-cost airline, reportedly offering 11% of his ASKs around the world. Ryanair follows suit, accounting for 10% of his ASK worldwide.
Global business model
According to OAG, the top 10 LCCs by market share are:
Airlines | question | Global share of LCC ASK | address |
---|---|---|---|
southwest airlines | 258,787,551,391 | 11% | America |
ryanair | 222,578,572,833 | Ten% | Ireland |
jet blue airlines | 125,968,773,545 | 6% | America |
indigo | 119,765,885,098 | Five% | India |
easyjet | 111,439,911,654 | Five% | England |
spirit airlines | 92,025,776,854 | Four% | America |
Wizz Air | 73,574,936,382 | 3% | Hungary |
Volaris | 60,537,085,892 | 3% | Mexico |
frontier airlines | 57,215,224,264 | 3% | America |
lion air | 51,742,760,127 | 2% | Indonesia |
Most of the top 10 LCCs are based in North America or Europe, but the airline category is not limited to these regions. OAG reported that this low-cost business model has been imitated around the world and deemed successful. IndiGo and Lion Air operate in South Asia and India, and these regions reportedly have the highest market penetration by LCCs, accounting for more than 60% of total seats last year.
How do LCCs keep their prices low?
There are several factors that make LCCs cheaper. A notable difference between low-cost airlines and traditional airlines is their fleet. According to OAG data, most LCCs operate a large number of just one aircraft family, with an average age of just under 12 years.
Airlines | Aircraft type | number of aircraft | average age |
---|---|---|---|
southwest airlines | boeing 737 family | 799 | 11.9 years |
ryanair | boeing 737 family | 291 | 11 years |
indigo | Airbus A320 family | 242 | 3.8 years |
spirit airlines | Airbus A320 family | 196 | 6.9 years |
easyjet | Airbus A320 family | 175 | 10.5 years |
Wizz Air | Airbus A320 family | 89 | 5.7 years |
Operating the same aircraft family is not the only factor that can lower ticket prices. Configuring an aircraft’s interior into a single cabin allows airlines to accommodate as many passengers as possible, reducing costs. While the seats may not be as spacious as the cabins of aircraft operated by traditional airlines, ticket prices are often more affordable.
LCCs have very little in-flight service. Limited drinks and food are provided and are not included in the ticket price and may be purchased. There is also an additional charge for carry-on baggage. This means that prices are always reflected at checkout, not at the time of booking.
Photo: Spirit Airlines
Passengers must also pay for their seats. While traditional airlines do this to get economy seats with more legroom or seats closer to the front of the aircraft, most LCCs do this to get seats in the cabin with more legroom or seats closer to the front of the aircraft. They charge you for your seat selection, regardless of whether it’s available or not.
Although the base price of a low-cost airline ticket is low, passengers who choose multiple additional items called accessories can make the total cost on a low-cost airline higher. According to OAG, this strategy has enabled the most successful LCCs to generate about half of their total revenue. Last year, the cost of ancillary services worldwide reached $103 billion, a statistic that helped the British government launch a consultation on cheap airline ticket pricing.
sauce: OAG