23 Jan 2020
Posted in Travel & Tourism
US low-cost carrier market sold the highest number of seats than any other destination in 2018
The US recorded the highest number of low-cost carrier (LCC) seats sold in 2018 at 246 million and the LCC industry in this destination continues to dominate over any other country, according to GlobalData, a leading data and analytics company.
Both Spain and the UK take second and third position with the top LCC markets in 2018 yet are substantially lower, highlighting the size and the appeal of the low cost market in the US.
GlobalData’s latest report, ‘Global Low Cost Airlines Market to 2023’, found that since 2017 there has been steady and continual growth experienced by LCC’s and forecasts that this growth will be ongoing until 2023. With a compound annual growth rate (CAGR) of 5.9% between 2017 and 2020, there is only a difference of 1% in the CAGR for 2020–2023, accentuating the steady growth rate of the LCC market.
With affordability factoring in as the main influencer in the consumer booking process, according to GlobalData’s Q4 2018 consumer survey, it is likely that the LCC market holds much appeal for the typical US traveler.
Delta, United Airlines and American Airlines (Full Service Carriers) have all been considered to be under threat by the rise of LCC’s over the years. Southwest Airlines, identified as a main competitor, held nearly a quarter of the entire US airline market in 2018.
Johanna Bonhill-Smith, Travel & Tourism Analyst at GlobalData, comments: “General challenges faced by all airlines look to an array of areas, yet operators are faced with pilot shortages, stringent government regulations concerning safety and rising costs of oil affecting fuel prices in the US particularly.
“Hyper-competition is also a major factor faced by many an operator and differentiation is key to remain competitive within the market place. Over 2020–21, the US low cost market shall see a new form of ultra-low-cost carrier (ULCC), launched by JetBlue as the airline aims to challenge industry operators further.
“For now the brand is nicknamed ‘Moxy’; in conjunction with Marriott’s millennial-focused hotel known for offering travelers a high tech experience. The airline will include four different service qualities available to buy including an ultra-low-cost fare available for all types of traveler to the airlines equivalent of a first-class service.
“JetBlue currently holds the fifth largest airline market share within the US in 2018 and the introduction of brands such as this may be sure to both rattle the industry for full service carriers (FSC) and contribute to the growth of the LCC operator.”