Low-Cost Carrier Market Report 2025

The low-cost carrier market size has grown rapidly in recent years. It will grow from $232.12 billion in 2024 to $266.07 billion in 2025 at a compound annual growth rate (CAGR) of 14.6%. The growth during the historic period resulted from expanding urbanization and improved connectivity between cities, greater use of digital booking and mobile platforms, intensified competition among airlines leading to lower fares, an increasing population of budget-conscious travelers, and enhanced government support alongside the liberalization of air transport policies.

The low-cost carrier market size is expected to see rapid growth in the next few years. It will grow to $453.4 billion in 2029 at a compound annual growth rate (CAGR) of 14.3%. The anticipated growth during the forecast period is driven by a rising demand for affordable air travel, increasing disposable incomes in emerging markets, the expansion of the tourism sector, a growing preference for short-haul and regional flights, and heightened awareness of low-cost travel options. Key trends expected in this period include advancements in fuel-efficient aircraft technology, the integration of digital booking and mobile platforms, innovations in ticketing and check-in systems, improvements in route optimization and scheduling software, and enhancements in in-flight entertainment and connectivity.

The growth of the tourism industry is expected to drive the expansion of the low-cost carrier market in the coming years. The tourism sector encompasses services and activities such as travel, lodging, dining, and entertainment for people traveling outside their usual surroundings for leisure, business, or other reasons. This industry is growing due to higher disposable incomes, which enable more individuals to afford leisure travel and related services. Low-cost carriers contribute to this growth by offering budget-friendly flight options, making travel more accessible to a broader population and encouraging both domestic and international tourism. For example, the UK’s Office for National Statistics reported that overseas visits to the UK increased from 31.2 million in 2022 to 38 million in 2023. Consequently, the expanding tourism industry is fostering growth in the low-cost carrier market.

Leading players in the low-cost carrier market are increasingly adopting strategic partnerships to make air travel more affordable, accessible, and convenient for a larger customer base. A strategic partnership involves collaboration between two or more organizations to leverage their strengths and work toward shared goals such as entering new markets, optimizing resources, or driving innovation. For instance, in May 2025, Qazaq Air, an airline based in Kazakhstan, partnered with Vietjet from Vietnam, which is expanding its fleet to meet rising travel demand. Together, they launched Vietjet Qazaqstan, a low-cost carrier intended to connect Kazakhstan with Southeast Asia and other regions, promote regional tourism, trade, and logistics, and operate a modern fleet of at least 20 Boeing 737 aircraft with advanced management and training systems. This collaboration aims to strengthen economic ties between the two countries and enhance the aviation landscape in Central Asia.

In October 2024, Air India Express Ltd., a low-cost airline based in India, merged with AIX Connect Pvt Ltd to enhance operational efficiency and strengthen its domestic and international network. This merger seeks to create a larger, more scalable, and profitable low-cost carrier by expanding network coverage and addressing the growing demand for affordable air travel in India and neighboring regions. AIX Connect Pvt Ltd is an Indian company providing low-cost passenger air transportation services.

Major players in the low-cost carrier market are Southwest Airlines Co., Air Canada, Singapore Airlines Ltd., Ryanair Group, JetBlue Airways Corp., easyJet plc, InterGlobe Aviation Ltd., Spirit Airlines Inc., WestJet Airlines Ltd., Wizz Air Holdings plc, Azul S.A., Flydubai, Allegiant Travel Company, Norwegian Air Shuttle ASA, flynas Co., Vueling Airlines SA, AirAsia Group Berhad, Air Arabia PJSC, Eurowings GmbH, SpiceJet Ltd.

North America was the largest region in the low-cost carrier market in 2024. The Middle East and Africa is expected to be the fastest-growing region in the forecast period. The regions covered in low-cost carrier report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the low-cost carrier market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the transport sector, particularly in fleet maintenance and logistics operations. Higher duties on imported commercial vehicles, tires, and engine components have increased operational costs for trucking and freight companies, forcing them to raise shipping rates or reduce margins. Airlines and maritime shippers face similar pressures, with tariffs on aircraft parts and shipbuilding materials driving up capital expenditures. Additionally, retaliatory tariffs in key export markets have reduced demand for U.S.-made transportation equipment, further straining revenue streams. The sector must now prioritize fuel efficiency, alternative sourcing, and automation to offset rising expenses while maintaining service reliability.

A low-cost carrier (LCC) is an airline that provides air travel at lower prices by reducing operational costs and limiting traditional services. These airlines focus on making flying more affordable and accessible to a wider range of passengers, often utilizing point-to-point routes, maximizing aircraft usage, and adopting a no-frills model. LCCs appeal to budget-minded travelers, encourage competition, and stimulate increased demand within the aviation sector.

The primary types of aircraft used by low-cost carriers include narrow-body, wide-body, and others. Narrow-body aircraft feature a single aisle and are primarily employed for short- to medium-distance flights, enabling cost-effective operations. They offer various services, such as passenger and cargo transport across different route categories, including short-haul (under 1,000 miles), regional (1,000 to 3,000 miles), and international flights. These services are made available through multiple distribution channels, including online platforms and travel agencies, catering to diverse applications such as individual and commercial travel.

The low-cost carrier market research report is one of a series of new reports that provides low-cost carrier market statistics, including low-cost carrier industry global market size, regional shares, competitors with a low-cost carrier market share, detailed low-cost carrier market segments, market trends and opportunities, and any further data you may need to thrive in the low-cost carrier industry. This low-cost carrier market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

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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