Global travel data provider OAG has published its latest analysis of the low-cost carrier market, with LCCs now making up almost a third of global airline capacity.
Budget airlines accounted for 32 per cent of all scheduled airline seats in March, up from 29 per cent in 2019 and 25 per cent in 2015.
OAG said that the LCC share of the market dropped in 2020 and 2021 during the Covid-19 pandemic, but began to rise again last year, sometimes exceeding one in three seats.
Putting aside the relatively small markets of Slovakia, Hungary and North Macedonia, India has the highest percentage share of LCC seats at 74 per cent, with other major markets where low-cost carriers are particularly dominant including Indonesia (63 per cent), Brazil and Mexico (both on 58 per cent), and Thailand (57 per cent).
LCCs now account for more than half of all scheduled airline capacity in 21 countries, with the UK just under this threshold at 48 per cent.
A total of 14 countries have seen LCC seat share increase by more than 10 per cent in the four years between March 2019 and March 2023, including France (+11 per cent), Saudi Arabia (+12 per cent), South Africa (+11 per cent) and Oman (+19 per cent).
In presenting the data OAG also questioned whether the term ‘low-cost carrier’ is still relevant, with carriers such as JetBlue now offering “a far more sophisticated proposition than in the early days of LCCs”.
“It could be perceived that the delineation between LCCs and legacy airlines is blurring, and that there are now carriers adopting a truly hybrid model, such as flydubai with their blend of network connections and lower fares than their sister airline Emirates,” said OAG.
The firm also pointed to the rise of so-called ‘ultra low-cost carriers’ (ULCCs) including Europe’s Ryanairand Wizz Air, which provide “a core offering of a basic level of service with a menu of options that passengers can add on”.
OAG said that these airlines would continue to seek higher volume markets as they take delivery of aircraft with more seats, highlighting that the B737 Max 200 now accounts for 20 per cent of Ryanair’s fleet, with a configuration of 197 seats compared to the carrier’s B737-800s at 189 seats.
Finally the report said that the challenge for LCCs would be in determining “which markets will offer the best potential for growth”, pointing to Wizz Air’s foray into the Middle East market.
“For Ryanair the much-discussed opportunity to cross the Atlantic remains the big question – will they or won’t they or equally will they finally find a way into Heathrow, Amsterdam or Frankfurt and really start to challenge the legacy carriers in their own backyards?”