LOW COST CARRIER LEC 3

USMAN NADEEM YEAR 2023-2024

 COMMERCIAL EXPANSION AND PRESENT DEVELOPMENT

In 2021, the global aviation network carried 3.5

billion passengers on 34 million scheduled
departures (preliminary figures). By 2030, current
projections suggest those numbers will nearly
double. Low-Cost Carriers have played a major role
in this extraordinary expansion of aviation over the
past quarter century, and there is every expectation
that they will continue to do so. Low-cost carriers
carried 984 million passengers in 2021, which was
28 per cent of the world total scheduled passengers.
 Contd:

This marked a 10 per cent increase compared to

2020, which means Low-Cost Carriers experienced a
passenger growth rate that was about one and a half
times the rate of the world total average passenger
growth.
 What underlies the LCC success story?

First, the growth of LCCs has gone hand-in-hand

with market liberalization. As domestic aviation
markets have been progressively deregulated in
many countries and as market-oriented air services
agreements have increasingly became the new
international norm, LCCs have seized the
opportunity to offer innovative air services that have
spawned new passenger demand, the so-called
"Southwest effect".
For example, Ryanair, easyJet, and other European
LCCs have taken advantage of the creation of a
common aviation area in the European Union to
capture 41% of the seat capacity on scheduled
services in Europe in 2021. In Africa, where market
access barriers remain high, the share of LCCs within
the region is at 9%. In Asia, the LCC share in 2021
accounts for 23%.
 CONTD:

A second observation: although LCCs have pursued a

number of different business models, common to all is
a laser-focus on the customer: identifying what
prospective airline passengers value—that is, what
they are willing to pay for—and then offering them
products to meet that demand.
Third: in a industry subject to surges in the cost of
fuel, not to mention crises such as terrorist attacks and
health scares, LCCs have understood that maintaining
a competitive advantage requires a relentless drive to
cut costs, expand revenues, and maximize efficiency.
There is no single airline type - whether traditional
network carrier, LCC or some hybrid of the two - that
is "best." Likewise, both hub-and-spoke and point-
to-point service respond to consumer needs and
market conditions. These different business models
encourage innovation and offer passengers enhanced
connectivity, whether for short- or long-haul
journeys.
LETS END