Strategy Briefing

Low-cost Carriers: Exploring New Territories

41 pages, Jan 2014

US$1,325

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LCCs continue to be a force to be reckoned with in passenger transportation. They maintained their global growth in 2013, with emerging markets showing more dynamic performances than developed ones, as LCCs catch up in terms of penetration rates. Diversified price offerings, fleet renewal and the diversification of destinations have been instrumental factors in the success of this segment.

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

LCCs dominate

Low-cost carriers (LCCs) continue to be the most successful category in air travel. They continue to gain popularity and share, and are pushing traditional airlines hard for business.

Blurring boundaries

The boundaries between schedule operators and LCCs are increasingly blurred. Many schedule airlines are reducing the frequency of flights and closing unprofitable routes, or are veering towards a hybrid model between schedule and low-cost, adopting several practices typical of no-frills carriers.

Asia Pacific to show the biggest growth

Asia Pacific is expected to be the key driver of low-cost growth over the next five years, thanks to its rapidly growing middle classes and an increasing number of LCCs. Point-to-point operators in the region are launching new domestic and international routes, as well as increasing the number of connecting flights among first- and second-tier cities, which is expected to contribute to growth.

Domestic routes on the agenda

LCCs take advantage of the increasingly popularity of budget air transportation by progressively increasing their dominance of domestic international routes, thus overtaking local schedule operators.

GDS distribution

LCCs sell their tickets primarily through direct channels, bypassing GDS booking systems and hence hindering growth for GDS providers. However, these carriers are increasingly looking to GDS to capture a more international audience for inter-Asian and Latin American flights.

What this report includes

Top-level strategic analysis of how major consumer trends will influence global markets
Consumer insight
Impact across all relevant consumer markets
Unique graphics and case studies
Key market snapshots
Accompanying presentation to synthesise main findings

Why buy this report

Identify factors driving change now and in the future
Understand motivation
Forward-looking outlook
Briefings and presentation should provoke lively discussion at senior level
Take a step back from micro trends
Get up to date estimates and comment

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I ntroduction

Scope

Executive Summary

Key findings

Air Segment Background

Brand DNA of the LCCs model

Tourism trips bounce back

LCCs still increasing share

Fuel prices and impact on airlines

SWOT: LCCs

Rail: picking up s peed - cheap vs fast

LCC Performance

Schedule vs LCCs growth

Regional performance: winners and losers

Venturing into international d omestic markets

Case study : Ryanair

Transforming the beast

U-turn for the Irish carrier

Ancillary revenues: the driver of profitability

Growth in Europe for LCCs?

Density of seats and de-seasonalisation

Why the LCC model is successful

Africa back on the airline map

Trends

Convergence of two models

Fleet on the agenda

Airbus orders 2013

Social media: unexplored territory

Website visits

LCC Operations

New take on distribution

Slow embrace of Wi-Fi

Weight reduction to the extreme

Battle of the bases

Opportunities and Future Outlook

Ageing population

Millennials aka G eneration Y

US$10 transatlantic travel: can it really take off ?

Low-cost goes upmarket

Asia Pacific spearheads growth

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Megatrends

Strategy Briefing

Low-cost Carriers: Exploring New Territories

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

LCCs dominate

Blurring boundaries

Asia Pacific to show the biggest growth

Domestic routes on the agenda

GDS distribution

What this report includes

Why buy this report

Want to find out more about this report?

Table of Contents

I ntroduction

Scope

Executive Summary

Key findings

Air Segment Background

Brand DNA of the LCCs model

Tourism trips bounce back

LCCs still increasing share

Fuel prices and impact on airlines

SWOT: LCCs

Rail: picking up s peed - cheap vs fast

LCC Performance

Schedule vs LCCs growth

Regional performance: winners and losers

Venturing into international d omestic markets

Case study : Ryanair

Transforming the beast

U-turn for the Irish carrier

Ancillary revenues: the driver of profitability

Growth in Europe for LCCs?

Density of seats and de-seasonalisation

Why the LCC model is successful

Africa back on the airline map

Trends

Convergence of two models

Fleet on the agenda

Airbus orders 2013

Social media: unexplored territory

Website visits

LCC Operations

New take on distribution

Slow embrace of Wi-Fi

Weight reduction to the extreme

Battle of the bases

Opportunities and Future Outlook

Ageing population

Millennials aka G eneration Y

US$10 transatlantic travel: can it really take off ?

Low-cost goes upmarket

Asia Pacific spearheads growth

Why buy this report?

Want to find out more about this report?

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