Low-Cost Carrier Market Report 2026

The low-cost carrier market size has grown rapidly in recent years. It will grow from $266.07 billion in 2025 to $304.53 billion in 2026 at a compound annual growth rate (CAGR) of 14.5%. The growth in the historic period can be attributed to deregulation of air travel, rising middle-class travelers, growth of budget tourism, aircraft leasing expansion, high aircraft utilization models.

The low-cost carrier market size is expected to see rapid growth in the next few years. It will grow to $516.89 billion in 2030 at a compound annual growth rate (CAGR) of 14.1%. The growth in the forecast period can be attributed to fleet modernization, sustainable aviation fuel adoption, digital airline operations, growth in regional connectivity, demand for affordable air travel. Major trends in the forecast period include expansion of point-to-point air routes, growth of ancillary revenue models, adoption of fuel-efficient aircraft, increase in digital booking platforms, demand for cost-optimized operations.

The growth of the tourism industry is expected to propel the growth of the low-cost carrier market going forward. The tourism industry refers to the sector that provides services and activities such as travel, accommodation, food, and entertainment to people traveling outside their usual environment for leisure, business, or other purposes. The tourism industry is increasing due to rising disposable incomes, allowing more people to afford leisure travel and related services. Low-cost carriers help the tourism industry by offering affordable flight options that make travel more accessible to a wider population, thereby boosting both domestic and international tourism. For instance, in May 2024, according to the Office for National Statistics, a UK-based official statistical agency, the number of overseas visits to the UK rose from 31.2 million in 2022 to 38 million in 2023. Therefore, the growth in the tourism industry is driving the growth of the low-cost carrier market.

Major companies operating in the low-cost carrier market are focusing on adopting strategic partnerships to provide more affordable, accessible, and convenient air travel for a wider range of passengers. A strategic partnership is a cooperative agreement between two or more organizations to combine their strengths and work together for mutual advantage. Its primary aim is to accomplish common objectives, such as expanding into new markets, optimizing resources, or driving innovation. For instance, in May 2025, Qazaq Air, a Kazakhstan-based airline, collaborated with Vietjet, a Vietnam-based company that is expanding its fleet to meet growing travel demand. low-cost airline to launch Vietjet Qazaqstan, a low-cost carrier, This new airline aims to connect Kazakhstan with Southeast Asia and beyond, boost regional tourism, trade, and logistics, and operate a modern fleet of at least 20 Boeing 737 aircraft with advanced management and training systems, enhancing economic ties between the two countries and Central Asia's aviation landscape.

In October 2024, Air India Express Ltd., an India-based low-cost airline, merged with AIX Connect Pvt Ltd to improve operational efficiency and bolster its domestic and international network. This partnership aims to establish a larger, more scalable, and profitable low-cost carrier, expanding network coverage and catering to the rising demand for affordable air travel in India and the surrounding region. AIX Connect Pvt Ltd is an India-based passenger air transportation company that provides low-cost carrier services.

Major companies operating in the low-cost carrier market report include Southwest Airlines Co., Ryanair Group, easyJet plc, InterGlobe Aviation Ltd. (IndiGo), AirAsia Group Berhad, Wizz Air Holdings plc, Spirit Airlines Inc., Frontier Airlines, JetBlue Airways Corp., Allegiant Travel Company, Vueling Airlines SA, Flydubai, Air Arabia PJSC, SpiceJet Ltd., flynas Co., Eurowings GmbH, Norwegian Air Shuttle ASA, Azul S.A., Scoot Pte Ltd., Peach Aviation Limited, Cebu Pacific Air, VietJet Aviation JSC, Lion Air Group, Volaris, SKY Airline.

North America was the largest region in the low-cost carrier market in 2025. The Middle East and Africa is expected to be the fastest-growing region in the forecast period. The regions covered in the low-cost carrier market report include Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the low-cost carrier market report include Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The low-cost carrier market consists of revenues earned by entities by providing services such as online booking platforms, call centers and chat assistance services, loyalty and rewards programs, and check-in counters and boarding facilitation. The market value includes the value of related goods sold by the service provider or included within the service offering. The low-cost carrier market also includes sales of in-flight equipment, ground support hardware, and ancillary products sold to passengers. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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