Low cost airlines are set to increase their market share in 2009 over legacy carriers, according to the Centre for Asia Pacific Aviation (CAPA). With the global economy in what is now seen as a worldwide recession, fuel prices have dropped considerably. That means more people will be flying budget or low cost airlines, while those carrier’s major costs will be lower. This makes for a unique combination that will help to drive growth in their market share over the next year.
The conclusions that CAPA has drawn come from an analysis of reports issued by the two major airline associations, the IATA, whose members are mostly full service airlines, and the ICAO, the world’s air transportation governing body. The reports indicate that premium demand will continue to fall during 2009 and drive major full service airlines to reduce capacity and increase mergers. At the same time, the low cost sector will continue to grow with fleet and network expansion.
Low cost airlines generally are more efficient than other carriers, according to CAPA, and this will help them to increase their market share in the coming year. One specific area that will see considerable growth for the LCC’s is in the Middle East. CAPA predicts that as many as 10 new budget carriers could be launched in the next two years for the region.
Useful resources
