Research And Markets, a market and industry research corporation, has released a report projecting significant growth in the global low-cost airlines market in the coming years. The report states that the market reached a size of $189.1 billion in 2022 and is expected to reach $315.4 billion by 2028, exhibiting a compound annual growth rate (CAGR) of 8.7% 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 use cost-efficient strategies to increase revenue, such as charging separately for services like food, beverages, early boarding, carry-on baggage, and car rental. They also use aircraft designed to reduce weight and increase fuel efficiency. Additionally, low-cost airlines often operate from less congested secondary airports to reduce airport fees, air traffic congestion, delays, and ground time between flights.
There are several key driving factors behind the exponential growth of the low-cost airline market. Firstly, there is a rise in domestic travel and tourism, with travelers opting for low-cost airlines to explore various domestic destinations affordably. Leading airline companies are also offering tickets directly through telephone or internet bookings, eliminating the need for third-party agencies and reducing transaction costs and service fees. The growing adoption of ticketless travel and increased internet penetration are also contributing to market growth. Furthermore, low-cost airlines typically operate point-to-point nonstop flights, reducing travel time and maximizing aircraft utilization.
Business travel and discounted fares also play a role in driving the growth of the low-cost airline market. Travelers are increasingly focused on minimizing travel time and costs, and market players are emphasizing offering discounted fares for early reservations while enhancing passenger connectivity. However, the COVID-19 pandemic has had a negative impact on the market, with many commercial flights being canceled due to travel restrictions.
Overall, the global low-cost airlines market is projected to experience significant growth in the coming years, with a CAGR of 8.7% from 2023 to 2028. This growth is driven by factors such as rising domestic travel and tourism, direct ticket bookings, point-to-point nonstop flights, and discounted fares. However, the market continues to face challenges due to the ongoing pandemic.