The global low cost airlines market size reached USD 221.3 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 430.5 Billion by 2033, exhibiting growth rate (CAGR) of 7.29% during 2025-2033. The rising domestic travel and tourism, widespread adoption of ticketless travel, the growing internet penetration, and inflating consumer disposable income in developing nations are some of the major factors propelling the market.

According to Cognitive Market Research, the global Low Cost Airline market size will be USD 301542.6 million in 2024. It will expand at a compound annual growth rate (CAGR) of 6.00% from 2024 to 2031.

North America held the major market share for more than 40% of the global revenue with a market size of USD 120617.04 million in 2024 and will grow at a compound annual growth rate (CAGR) of 4.2% from 2024 to 2031.
Europe accounted for a market share of over 30% of the global revenue with a market size of USD 90462.78 million.
Asia Pacific held a market share of around 23% of the global revenue with a market size of USD 69354.80 million in 2024 and will grow at a compound annual growth rate (CAGR) of 8.0% from 2024 to 2031.
Latin America had a market share of more than 5% of the global revenue with a market size of USD 15077.13 million in 2024 and will grow at a compound annual growth rate (CAGR) of 5.4% from 2024 to 2031.
Middle East and Africa had a market share of around 2% of the global revenue and was estimated at a market size of USD 6030.85 million in 2024 and will grow at a compound annual growth rate (CAGR) of 5.7% from 2024 to 2031.
The Leisure Travel Purpose held the highest Low Cost Airline market revenue share in 2024.

Market Dynamics of Low Cost Airline Market

Key Drivers for Low Cost Airline Market

Increased Demand for Affordable Travel to Increase the Demand Globally

Increased demand for affordable travel is a major driver of the low-cost airline market, as budget-conscious consumers seek cost-effective alternatives to traditional airlines. With rising disposable incomes and a growing middle class globally, more travelers are looking for ways to reduce their travel expenses while maintaining accessibility to diverse destinations. Low-cost airlines offer competitive pricing, attractive promotions, and minimal frills, catering to this segment's desire for affordable options. Additionally, the expansion of low-cost carriers into new markets and increased flight frequencies enhance connectivity, making air travel more accessible to a broader audience. This shift towards budget-friendly travel options aligns with changing consumer preferences, driving significant growth in the low-cost airline sector.

Expanding Middle-Class Population to Propel Market Growth

The expanding middle-class population is driving the low-cost airline market as it significantly increases the number of potential travelers with disposable income to spend on air travel. As more individuals from emerging markets and developing regions enter the middle class, they seek affordable travel options to explore new destinations and experience different cultures. Low-cost airlines cater to this growing segment by offering budget-friendly fares and flexible travel solutions. The proliferation of budget carriers allows these travelers to access air travel that was previously out of reach. Additionally, the expanding middle class often prioritizes cost-effective travel options, further fueling demand for low-cost airlines. This demographic shift enhances market growth and encourages budget airlines to expand their services and routes to meet rising consumer demand.

Restraint Factor for the Low Cost Airline Market

High Initial Costs to Limit the Sales

High initial costs are a significant restraint on the low-cost airline market because establishing and operating a budget airline requires substantial investment. The initial expenses include purchasing or leasing aircraft, setting up maintenance facilities, and investing in technology and infrastructure. Additionally, regulatory compliance and obtaining necessary certifications involve considerable costs. These high upfront investments can deter new entrants and limit the expansion of existing low-cost carriers. While low-cost airlines aim to minimize operational costs through streamlined services and efficiencies, the large initial financial outlay remains a barrier. Consequently, these high capital requirements can slow market growth and affect the ability of low-cost airlines to compete effectively or expand into new regions.

Key Trends for the Low Cost Airline Market

Digitalization and Self-Service Technologies

Low-cost airlines are channeling investments into digital solutions aimed at enhancing customer experiences and reducing operational expenses. Mobile check-ins, self-bag drops, and...

After months of intense fluctuation in 2020 and early 2021, the European low-cost airlines market share stabilized around the ** percent margin. As of September 2022, the market share of low-cost airlines in Europe amounted to approximately **** percent of the total number of flights.

North America Low Cost Airline market size will be USD 120617.04 million in 2024 and will grow at a compound annual growth rate (CAGR) of 4.2% from 2024 to 2031. North America has emerged as a prominent participant, and its sales revenue is estimated to reach USD 175015.7 Million by 2031. This growth is mainly attributed to the region's increasing demand for affordable travel options and a rise in budget-conscious travelers.

Unlock data-backed intelligence on Global Low-Cost Airlines Market, size at USD 298.0 billion in 2023, showcasing growth opportunities and future trends.

Snapshot img

Low-Cost Carrier (LCC) Market Size 2025-2029

The low-cost carrier (LCC) market size is forecast to increase by USD 348.2 billion, at a CAGR of 15.4% between 2024 and 2029.

The market is experiencing significant growth, driven by the increasing air passenger traffic worldwide. This trend is fueled by the rising preference for affordable travel options, making LCCs an attractive choice for price-sensitive consumers. However, this market is not without challenges. Operating expenses for LCC companies continue to rise, putting pressure on their profitability. The need to maintain low fares while managing these costs presents a significant challenge. Moreover, the increasing adoption of smart airports and advanced technologies, such as contactless check-in and mobile applications, is transforming the industry landscape. LCCs must adapt to these trends to remain competitive and provide a seamless travel experience for their customers.
In summary, the LCC market is characterized by robust growth, fueled by increasing passenger traffic and cost-conscious consumers, while facing challenges from rising operating expenses and the need to innovate to stay competitive in a rapidly evolving industry. Companies seeking to capitalize on market opportunities and navigate challenges effectively must focus on optimizing their operational costs, leveraging technology to enhance the customer experience, and continuously adapting to changing market dynamics.

What will be the Size of the Low-Cost Carrier (LCC) Market during the forecast period?

Explore in-depth regional segment analysis with market size data - historical 2019-2023 and forecasts 2025-2029 - in the full report.
Request Free Sample

In the market, dynamics continue to evolve, shaping various sectors with ongoing activities and patterns. Ground handling processes are streamlined through self-service kiosks and digital platforms, optimizing distribution channels and reservation systems. Yield management software and pricing strategies adapt to passenger demand, while route planning and seat allocation are fine-tuned for maximum load factor and capacity utilization. Revenue management and passenger loyalty programs are leveraged to generate ancillary revenue through dynamic pricing and slot allocation. Risk management and airline alliances are essential for cost optimization and fuel efficiency, as LCCs navigate the complexities of turnaround time and fleet management.

Passenger experience is a top priority, with in-flight entertainment, cabin crew training, and customer service enhancing the overall journey. Safety regulations, airport infrastructure, technical maintenance, and sustainability initiatives are continually addressed to ensure operational efficiency and regulatory compliance. Cargo operations, charter flights, aircraft leasing, and digital transformation are additional areas of focus for LCCs, as they adapt to the ever-changing market landscape. Code sharing agreements, unaccompanied minors, online check-in, and web check-in are integral components of the LCC business model, further emphasizing the continuous dynamism of this sector. In this competitive environment, LCCs must remain agile, addressing the challenges of aviation safety, flight scheduling, inventory management, and aircraft maintenance, while maintaining a focus on passenger experience and cost optimization.

How is this Low-Cost Carrier (LCC) Industry segmented?

The low-cost carrier (LCC) industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Service

  Passenger service
  Cargo service


Type

  Narrow body
  Wide body


Haul

  Short Haul
  Long Haul


Geography

  North America

    US
    Canada


  Europe

    Germany
    Italy
    Spain
    UK


  APAC

    Australia
    China
    India
    Japan


  Rest of World (ROW)

By Service Insights

The passenger service segment is estimated to witness significant growth during the forecast period.

The market has experienced significant growth due to the rising number of air passengers. According to the International Air Transport Association (IATA), global passenger demand, measured in revenue passenger kilometers (RPKs), increased by 8.1% year-on-year in November 2024, while capacity, measured in available seat kilometers (ASK), grew by 5.7%. This led to a load factor of 83.4%, an improvement of 1.9 percentage points. International passenger demand surged by 11.6% compared to November 2023, with capacity expanding by 8.6%, resulting in a higher load factor. LCCs face substantial fuel costs, which can significantly impact their profitability, as they already offer lower fares than traditional carriers.

Self-service kiosks and online check-in have become common practice

Low cost carriers have rapidly expanded their share of the global air travel market over the last decade or so; in 2020, low-cost carriers accounted for ** percent of the world’s total seat capacity. Low-cost carrier marketLow cost carriers are different from full service carriers in how they are able to offer passengers lower ticket prices, primarily through two mechanisms. The first is to charge additional fees for services usually included by full service providers, such as checked luggage and in-flight food and beverages. Second, low cost carriers often (although not always) operate from secondary airports, which generally are cheaper for airlines to use. Leading low-cost carriersWhile the largest low cost carrier market is Europe, the leading low cost carrier both in terms of the number of seats offered and revenue generated is the U.S. carrier Southwest Airlines. Ryanair, the Irish carrier ranked second on both metrics, is growing at a faster rate though, meaning this gap may narrow over time.

The global low-cost carrier market size was worth around USD 275.8 billion in 2024 and is set to register a CAGR of more than 18.2%, exceeding USD 2.42 trillion revenue by 2037. Narrow-Body segment is expected to reach 73.1% industry share, driven by fuel efficiency and lower operating costs.

The global low-cost airline market is experiencing robust growth, with a market size of $129.13 billion in 2025 and a projected Compound Annual Growth Rate (CAGR) of 4.7% from 2025 to 2033. This expansion is fueled by several key factors. Increased disposable incomes, particularly in emerging economies, are driving demand for affordable air travel. The rise of online booking platforms and the increasing efficiency of budget airlines have lowered operational costs, allowing them to offer competitive fares. Furthermore, a growing preference for leisure travel, coupled with the expansion of low-cost carriers into new routes and markets, significantly contributes to market growth. The segment's success also hinges on effective cost management strategies, including fuel efficiency measures and ancillary revenue generation. Challenges include fluctuating fuel prices, increased competition, and potential economic downturns that could impact consumer spending on discretionary items such as air travel. Competition within the low-cost airline sector is fierce, with established players like Ryanair, EasyJet, and AirAsia vying for market share alongside newer entrants. Regional variations in growth are expected, with Asia-Pacific and North America likely to witness significant expansion due to population growth and increasing tourism. However, Europe, already a mature market, will likely see slower, steadier growth. The continued success of low-cost carriers hinges on their ability to adapt to evolving consumer preferences, maintain operational efficiency, and navigate economic uncertainties. Strategic partnerships, route expansion into underserved markets, and the implementation of sustainable practices will become increasingly vital for long-term market leadership. The segment's dynamism ensures a continuously evolving landscape, demanding continuous adaptation and innovation.

Low Cost Airlines Market Outlook 2032

The global low cost airlines market size was USD 246.4 Billion in 2023 and is projected to reach USD 539.2 Billion by 2032, expanding at a CAGR of 10.40% during 2024–2032. The market growth is attributed to the growing demand for affordable travel.



Increasing demand for affordable travel is leading to the rise of low-cost airlines. These carriers, which prioritize cost-efficiency and streamlined services, are democratizing air travel, making it accessible to a broad demographic. Low-cost airlines are finding unique applications in the logistics sector beyond their traditional role in passenger transport, providing cost-effective solutions for cargo transport, and in the tourism industry, where they play a pivotal role in promoting budget travel.

Growing concerns about passenger safety and environmental impact are leading to the implementation of new regulations by organizations such as the International Civil Aviation Organization (ICAO). These regulations mandate improved safety measures and reduced carbon emissions for all airlines, including low-cost carriers. These rules are likely to drive innovation in the market, pushing airlines to invest in safe, fuel-efficient aircraft and sustainable practices.

Impact of Artificial Intelligence (AI) in Low Cost Airlines Market

Artificial Intelligence (AI) has a significant impact on the low cost airlines market. AI's predictive analytics capabilities allow airlines to optimize flight routes and schedules, reducing fuel consumption and operational costs. Furthermore, AI-powered chatbots provide round-the-clock customer service, handling queries and complaints, thereby improving customer satisfaction.



The use of machine learning algorithms enables dynamic pricing, adjusting ticket prices based on demand and competition, which increase profitability. Additionally, AI's role in predictive maintenance foresees potential aircraft issues, reducing downtime and maintenance costs.&

The global Low Cost Airlines market is forecasted to grow at a noteworthy CAGR of 10.65% between 2025 and 2033. By 2033, market size is expected to surge to USD 713.86 Billion, a substantial rise from the USD 287.11 Billion recorded in 2024.

The Global Low Cost Airlines market size to cross USD 713.86 Billion in 2033. [https://edison.valuemarketresearch.com//uploads/report_images/VMR11219385/low-

Southwest Airlines, carried approximately ***** million travelers in 2022, the highest traffic figure among the other selected low-cost airlines. LCC business modelIn the airline industry, ancillary revenue is a major financial constituent for low-cost carriers and ultra-low-cost carriers all over the world. Unbundled sources, such as baggage fees or on-board activities like food or Wi-Fi, represented the highest share of revenue for low cost airlines like Ryanair in Europe or Spirit Airlines in the U.S. in 2020. The success of this business model can not only be seen in the airline’s profitability but also in the increasing demand for this type of service in the aviation industry. As low-cost carriers continue to increase their market share in the air transportation sector, passengers are more inclined to choose what they want to pay for when flying.

Low Cost Airlines Market Outlook

As of 2023, the global low-cost airlines market size is estimated to be around USD 150 billion, with a projected growth to approximately USD 310 billion by 2032, reflecting a robust CAGR of 8.5%. This growth is driven by rising travel demand, increased disposable income, and the growing preference for budget-friendly travel options among consumers worldwide.

One of the significant growth factors contributing to the expansion of the low-cost airlines market is the surge in middle-class populations across emerging economies, particularly in Asia-Pacific and Latin America. This demographic shift has resulted in an increased demand for affordable air travel, as more individuals have the financial means to travel for both leisure and business purposes. Furthermore, government initiatives to boost tourism and enhance regional connectivity through the development of new airports and upgrading existing infrastructure are fueling market growth.

The technological advancements in the aviation industry, such as fuel-efficient aircraft and improved route optimization software, are also pivotal in driving the low-cost airlines market. These innovations reduce operational costs, allowing airlines to offer lower fares while maintaining profitability. Additionally, the rise of digital booking platforms and mobile apps has streamlined the ticket purchasing process, making it more convenient for passengers and enabling airlines to reach a broader customer base.

Another crucial factor is the strategic partnerships and alliances formed between low-cost carriers and traditional airlines. Such collaborations allow low-cost airlines to expand their route networks and offer more competitive pricing, thereby attracting a diverse range of passengers. Moreover, the relaxation of aviation regulations in several regions has facilitated the entry of new players into the market, intensifying competition and driving down ticket prices.

Regionally, Asia-Pacific is expected to witness the highest growth in the low-cost airlines market, driven by the increasing urbanization and rising disposable incomes in countries like China, India, and Southeast Asian nations. North America and Europe also present significant growth opportunities due to the well-established aviation infrastructure and a high propensity for air travel among residents. In contrast, the Middle East & Africa and Latin America are gradually emerging as potential markets, supported by economic development and tourism promotion efforts.

Service Type Analysis

The low-cost airlines market is segmented into passenger service and cargo service. Passenger service remains the dominant segment, accounting for the majority of market share. This dominance is attributed to the growing preference for affordable travel among both leisure and business travelers. Low-cost carriers have revolutionized air travel by offering point-to-point services and eliminating frills, thus attracting price-sensitive consumers. The advent of ancillary revenue streams, such as baggage fees and in-flight purchases, has also bolstered the profitability of passenger services.

On the other hand, the cargo service segment is gradually gaining traction as low-cost airlines diversify their revenue streams. The increasing demand for e-commerce deliveries and time-sensitive shipments has prompted low-cost carriers to optimize their cargo operations. By leveraging their extensive route networks and frequency of flights, these airlines can offer competitive rates and reliable services to businesses. Furthermore, the integration of advanced logistics and tracking systems ensures efficient cargo handling and delivery, enhancing customer satisfaction.

Technological advancements play a crucial role in the growth of both passenger and cargo services. For instance, the implementation of automated check-in kiosks and self-bag drop systems has streamlined the boarding process, reducing wait times and operational costs for passenger services. In cargo services, innovations such as real-time tracking and temperature-controlled containers have improved the handling of perishable goods and high-value items, expanding the market potential for low-cost carriers.

The evolving consumer preferences and expectations are also shaping the service offerings of low-cost airlines. Passengers increasingly seek value-added services, such as Wi-Fi connectivity, in-flight entertainment, and premium seating options, even on budget flights. In response, low-cost carriers are enhancing th

Budget airlines have benefitted from consumers increasingly seeking value for money. The industry is highly concentrated, consisting of only four airlines. External factors, including business and consumer confidence, household disposable income and outbound and international tourist numbers, determine demand for budget airlines. Shocks like natural disasters, terrorist attacks and disease outbreaks also affect demand. Revenue is expected to inch upward at a compound annual rate of 0.3% over the five years through 2024-25 to £11.1 billion, including growth of 5.9% in 2024-25. Before the COVID-19 outbreak, subdued confidence and weak growth in household disposable income due to Brexit supported demand for budget airlines' services from cost-conscious customers. Low-cost carriers also benefitted from higher demand for air travel as passenger numbers were consistently rising. However, the collapse of budget airlines like Monarch, Flybe and Norwegian Air UK negatively affected revenue. The COVID-19 pandemic was disastrous for airlines, with stringent restrictions on international travel causing demand to plummet to record lows. The easing of restrictions on international travel, aided by recovering confidence, unleashed pent-up demand. Swelling passenger numbers have fuelled revenue growth since 2021-22. Soaring inflation and economic uncertainty have somewhat constrained revenue growth though these conditions have also encouraged more consumers to seek budget airlines. Revenue is forecast to expand at a compound annual rate of 4% over the five years through 2029-30 to £13.5 billion, driven by more robust demand for air travel, particularly low-cost flights. Budget airlines' expansion of fleets and operating bases will also fuel growth. Investment in aircraft and competitive pressures will likely weigh on the profit margin in the coming years. Budget airlines will have to innovate and improve their offerings to enhance the customer experience and stand out.

Asia Pacific Low Cost Airline market USD 69354.80 million in 2024 and will grow at a compound annual growth rate (CAGR) of 8.0% from 2024 to 2031. increasing disposable incomes, a rising middle class, and strong demand for affordable air travel is expected to aid the sales to USD 116072.6 million by 2031

The low-cost carrier (LCC) market is expected to grow at a CAGR of 10.00% from 2025 to 2033. The market is driven by factors such as the increasing demand for air travel, the rising popularity of online booking, and the growing number of budget-conscious travelers. The market is segmented by aircraft type, destination, and distribution channel. The narrow-body aircraft segment is expected to account for the largest share of the market, while the domestic destination segment is expected to grow at the highest CAGR. The online distribution channel is expected to gain popularity, as more and more travelers are booking their flights online. The key players in the LCC market include Azul S A, Westjet Airlines Lt, Air Arabia PJSC, Easy Jet Plc, Norweigan Air Shuttle, Ryan Air, Southwest Airlines Co, Spirit Airlines, Spicejet Ltd, JetBlue Airways Corporation, Indigo, AirAsia Group Berhad, and Alaska Air Group Inc. These players are focusing on expanding their operations, increasing their fleet size, and offering new routes to meet the growing demand for low-cost air travel. The LCC market is expected to continue to grow in the coming years, as the demand for affordable air travel continues to increase. Notable trends are: By Market Segmentation, Narrowbody Aircraft Type is Expected to Witness Significant Growth During the Forecast Period.

Global Low Cost Airlines is segmented by Application (Aviation industry, Tourism industry, Travel industry, E-commerce, Lifestyle), Type (Travel, Aviation, Airlines, Low-cost carriers, Budget travel) and Geography(North America, LATAM, West Europe, Central & Eastern Europe, Northern Europe, Southern Europe, East Asia, Southeast Asia, South Asia, Central Asia, Oceania, MEA)

GlobalData’s Low Cost Airline Market report provides in-depth analysis of the key market trends that are shaping the future of this segment and an analysis of the low cost airline market globally. Detailed market insight is provided on the Americas, Asia-Pacific, Middle East & Africa, and Europe. It also features profiles of some of the segment’s leading players and looks at how companies can better meet their customers' needs. Read More

In 2021, the market share of low-cost carriers in Thailand accounted for around **** percent. In that same year, the passenger volume of low cost airlines amounted to nearly **** million. Since 2010, the market share of low-cost airlines has been gradually increasing up until 2020 due to the COVID-19 pandemic. Low-cost airline market in Thailand Low-cost airlines are highly popular in Thailand due to lower ticket prices compared to full-service airlines. Occasionally, travelling domestically with a low-cost airline in Thailand is cheaper than public transportation including busses and trains. The popularity of low-cost airlines is reflected in the number of passengers when compared to their full-service counterparts since 2011. Key players in the low-cost airline market The low-cost airline market in Thailand is very competitive. With various promotions and increasing flight frequencies across airlines, passengers have a variety of choices. Some of the most well-known low-cost airlines in Thailand are Thai Air Asia, Thai Lion Air, and Nok Air. In 2019, Thai Air Asia had the highest number of domestic passengers in Don Mueang International Airport, amounting to more than ten million, following by Nok Air. On the other hand, Thai Lion Air carried the highest number of international passengers in Phuket International Airport that same year.

The market size of the Low Cost Airlines Market is categorized based on Service Type (Passenger Services, Cargo Services) and Fleet Type (Narrow-Body Aircraft, Wide-Body Aircraft) and Distribution Channel (Online Travel Agencies, Direct Booking, Travel Agents) and geographical regions (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa).