In the current favourable environment of relatively cheap oil, Low Cost Carriers (LCCs) find themselves operating in the right consumer segmentation to accommodate growth of the middle class and the consequent increase worldwide in the propensity to fly. This has translated into a compound annual growth rate (CAGR) of 7.1% for LCCs in the last decade while the total global market (including all commercial flights) achieved only a 3.5% CAGR.
There is no doubt that the Low Cost Carrier (LCC) business model is a success. Measured by 2015 net profit margins for all carriers worldwide, the four airlines with the highest margin globally are all short-haul LCCs, namely Ryanair, Cebu Pacific, Allegiant and Spirit. Will the long-haul LCC prove to be just as successful?
This is the last of our mini-series of articles on the Chinese aviation market. After looking at China’s Propensity to Fly against GDP and urbanisation, here’s some key numbers to illustrate China’s growing aviation market between 2006 and 2015.
This is the second in our mini-series on aviation in China. Following on from part 1 where we showed how China’s GDP per capita and propensity to fly follow a classic developing economy upward trajectory, in this article we are illustrating the relationship between urbanisation and propensity to fly.
In the run up to World Routes taking place in Chengdu, China, we are going to be running a series of short articles to illustrate the growth of the Chinese aviation market over the past 10 years, and here is the first.