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LCCs are outgrowing general traffic in every continent of the world. Europe remains the most active market for LCC business, with 250 million passenger trips per year. North America is next largest with 173m, but Asia is fast catching up, recording over 117m passenger trips on average over the last five years after growing more than 150% in the same period.
Latin American, Middle Eastern and African low cost carrier traffic has almost doubled in the past 5 years as well, and still has plenty of room for further growth. These numbers include both LCC and hybrid carriers. It’s also worth noting that LCCs only operate a relatively small share of domestic air traffic in Asia, the Middle East and Africa.
Regional markets the world over are far less saturated with LCC traffic than Europe. LCCs do operate a notable share of inter-regional journeys; around 5% in Europe, Asia and North America and around 10% in Middle East, Latin America and Oceania. However, a considerable portion of inter-regional passenger trips represents short-haul journeys between neighbouring regions.
As result, LCCs are yet to demonstrate a viable model for capturing longer-haul market share.
The introduction to the market of large numbers of new middle class travellers from emerging economies in the next 10 years will pose great opportunities for LCCs. New travellers are likely to come with lower expectations about the service experience and demand lower cost travel solutions, so are likely to find LCCs highly attractive.
The more successful LCCs become, the more likely they are to outgrow their original business model and be forced to adapt.
Download our report, Shaping the Future of Travel , for more about LCC trends that will influence the travel industry for decades to come.