What are the main drivers of low cost travel revolution? What is the success recipe for running a low-cost? For the second year running, CAPA Aviation Centre held a dedicated LCC market overview Global LCC Summit, taking place on February 25-26 in Singapore.
Despite increasing number of low cost carriers, the debate is still ongoing on which business model is actually better: being a LCC, or being a full service group (FSG) subsidiary. While low-costs are usually offering better route flexibility, having newer aircraft and a certain kind of independence, FSG can benefit from traffic aggregation and from lower buyer costs they often get for being longer in the market.
Meanwhile, it’s not easy to describe a pure LCC or FSG model nowadays, as both have been actively adopting business characteristics of each other: trying new pricing models, network connectivity and route development strategies.
There has been much talk on economic recession lately, threatening to affect stable traffic growth, predicted by International Monetary Fund for 2019 and 2020. Currently, the biggest risks to low cost airlines and burdens on their finance sheets are posed by excess capacity, increasing fuel prices and a possible slump in demand.
The next CAPA event – CAPA Americas Aviation Summit, is opening doors at Denver, Colorado, on 18-19th of March.