Low-cost Carriers Still the Minnows of Long-haul

Even though they continue to grow very quickly, low-cost long-haul operators still represent only a tiny fraction of the global long-haul market.

Norwegian Air, the world’s largest low-cost long-haul operator in 2017, continues its rapid transatlantic network growth with Boeing 737 Max 8s.

Post

Copy

By Chris Kjelgaard

January 15, 2018

Despite increasing their combined total weekly long-haul departures by 19.7 percent from the end of 2016 to the end of 2017, the world’s 13 largest low-cost long-haul (LCLH) airlines still provide only 3.4 percent of all long-haul departures and even at their current growth rate their effect on the overall long-haul market will remain modest for years to come.

That conclusion is one of several findings on air transport “world hot topics” reached by Oliver Wyman in the newly released 2017-2018 edition of the consulting firm’s annual Airline Economic Analysis, a 75-page report authored by partner Tom Stalnaker and colleagues Khalid Usman, Aaron Taylor, and Grant Alport.

Led by Norwegian as the world’s largest LCLH airline at the end of last year, the 13 carriers recorded a total of 1,109 long-haul departures a week by October, the authors found. The report also analyzed, in descending order of weekly long-haul departures, AirAsia X; WestJet; Lion Air; Azul; Wow Air; Hainan Airlines subsidiary Capital Airlines; Eurowings; Cebu Pacific; Thai AirAsia X; Jin Air; French Blue; and IAG subsidiary Level.

Last year flights within Asia represented the largest regional market for LCLH service, and LCLH departures within the region grew 4.8 percent from 2016 to 2017, according to the report. Year-over-year, the Europe-U.S. market—the second-largest LCLH market in 2017 and the fastest-growing in absolute departure numbers—saw departures soar by 58.6 percent. In all, LCLH carriers added nearly 100 weekly transatlantic departures in the 12 months to the end of December, the report noted.

Six of the top ten LCLH routes in 2017 linked Asian cities and five connected European markets, the report noted. “It is interesting to note that all of the major world regions are represented in the top ten,” the report added. South America-U.S. ranked as the top LCLH market in 2017 in terms of percentage growth year-over-year, as weekly departure numbers jumped 74.4 percent, to 68, as a result of Azul’s quickly increasing penetration of the Brazil-U.S. market.