India leads the rise as the fastest growing major global LCC market this year, but the UK and Australia see declines

Almost 115 million additional seats were offered by Low Cost Carriers (LCCs) during the first nine months of 2018, versus the same period last year, new analysis from The Blue Swan Daily has revealed. While the lines between traditional and LCCs continue to blur, this figure, a +10.1% rise to over 1.25 billion global seats (over 4.5 million seats per day), has helped the sector boost its world share of capacity to 29.7%, up one full percentage point on last year.


Summary:

  • New research from The Blue Swan Daily reveals that global Low Cost Carrier (LCC) departure capacity rose +10.1% year-on-year across the first nine months of 2018;
  • The analysis shows almost 115 million additional seats were offered by LCCs during the first nine months of 2018, versus the same period last year;
  • India has reinforced its position as the second largest LCC country market with the largest increase in departure seats within the sector (an additional 15.6 million).
  • The United Kingdom and Australia where the only top 20 LCC country markets to see a decline in year-on-year capacity, albeit at very modest levels.

The data, based on flight schedules from intelligence provider OAG, shows that the LCC sector has grown at more than double the rate of the mainline market (+4.5% for the same period), with the emerging low cost long haul sector complementing the already established short haul model. Interestingly, 18 of the world’s top 20 LCC country markets saw an increase in LCC seats during the first nine months of 2018, eleven of them at double-digit rates.

India has reinforced its position as the second largest LCC country market with the largest increase in departure seats within the sector (an additional 15.6 million). It also had the largest year-on-year rise among the top ten country markets, up +20.7%. Double-digit rises were also recorded in the top ten by China (+19.1%), Germany (+18.7%) and Thailand (+16.5%). The USA, where the model was born, remains the largest LCC market at more than two-and-a-half times the size of the emerging Indian market.

Above average year-on-year rises dominate among the countries ranked between 10 and 20, with eight of them reporting double-digit growth, including South Korea, which has seen LCC capacity jump +40.9% and surpass 100,000 departure seats per day. Across the first nine months of 2018 South Korea has seen the fourth largest rise in LCC seats behind India, USA and China and in the process has jumped ahead of both France and Malaysia in terms of LCC market size.

CHART – Most of the world’s largest LCC country markets have recorded year-on-year capacity growth during the first nine months of 2018Source: The Blue Swan Daily and OAG

Other stand out performers in the top 25 LCC country markets across the analysis period include Vietnam (+20.1%), Turkey (+16.8), Malaysia (+14.6%), Philippines (+14.2%), Japan (+12.3%), Mexico (+12.3%), Canada (+11.8%) and Poland (+11.4%).

There are now 160 countries with scheduled LCC operation with Mozambique, the Democratic Republic of Congo and Uzbekistan receiving new flights. These range from over 930,000 LCC departure seats per day at the top to just 23 seats per day at the bottom, and highlights the amazing growth of the LCC sector, but also the opportunity that exists for it to still grow in certain parts of the world.

The analysis highlights lots of positives, but there are some examples of LCC year-on-year capacity declines across the nine month period. The largest markets to see falls in LCC departure capacity are the relatively mature LCC markets of the United Kingdom (ranked 6th), with a -0.5% decline and Australia (ranked 20th), with a 0.2% fall. Other country markets seeing a reduction in LCC departure seats capacity in the first nine months of 2018 versus the same period in 2018 include Saudi Arabia (-2.4%), Belgium (-1.9%), Colombia (-2.2%) and New Zealand (-2.5%).