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Travel’s surprising saviour?


Analytics firm says flyers will prioritise savings over service

Low-cost carriers (LCCs) mightn’t offer the level of service traditional airlines boast, but they do beat full service carriers where it matters for many: price. And it’s this factor, along with LCCs’ agililty that will see the model lead the post-pandemic recovery for air travel, says a leading data and analytics firm. 

 

 

According to GlobalData, LCCs’ “frugal cost-cutting measures”, flexibility around network planning and resilience will allow it to “absorb pent-up demand and capitalize on any opportunities ahead of other high-cost model airlines”. 

 

“Although all airlines have drastically reduced costs to weather the storm created by COVID-19, it is evident that low-cost carriers have managed to push already low-cost bases even lower,” GlobalData Travel and Tourism Analyst Gus Gardner remarked, adding that LCCs had “trimmed costs well”. 

 

“These carriers can now operate cash-positive routes with a lower load factor than before, which is incredibly important with the current low levels of demand.”

 

“LCCs were the first off the blocks to capture any pent-up demand in the market and were successful in doing so.”

 

Polling nearly 6,000 international consumers in December 2020, GlobalData’s latest COVID-19 Recovery Survey found that the coronavirus pandemic had increased concerns around family finances, with a whopping 87% of respondents ‘extremely’, ‘quite’, or ‘slightly’ worried about their current circumstances.  

 

“The low fares offered by LCCs will better cater to the increased need of affordability,” Gardner said. 

 

“Cost-cutting measures will allow LCCs to push ticket prices to new lows if necessary and still break-even, leaving other carriers at the risk of flying unprofitably if they choose to compete. 

 

“These airlines will likely gain a stronger foothold in the market as a result of the pandemic. 

 

“With leisure travel most likely to rebound first and LCC’s short distance, point-to-point networks will better suit pandemic-cautious travelers looking for trips closer to home”.

 

 

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Written by: Mark Harada
Published: 1 March 2021

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