Low-cost airline capacity booms in Asia and takes a huge leap in Eastern Europe. Amadeus analysis on the first half of 2013 shows that Indonesia, India, Thailand and Malaysia combined account for over 50% of global LCC seat capacity growth of 6.8% . London maintains its position as the world’s largest LCC city by capacity, with nearly 15 million available LCC seats in the first half of 2013 . Europe shows a divided landscape: from huge growth in Warsaw (63%) to Madrid’s sharp decline (-27%)
New analysis from Amadeus’ Air Traffic solution reveals that low-cost carriers (LCCs) are showing significant confidence in their potential with an overall global increase in seat capacity* of 6.8% in the first six months of 2013 compared to the same period in 2012**. The analysis*** paints a picture of strong capacity growth across Asia and the Middle East with only modest increases across Europe and North America.
Region Total number of LCC seats 2012 (millions) Total number of LCC seats 2013 (millions) Total increase in LCC seats (millions) LCC capacity change
Global 523.2 558.9 35.6 6.80%
Asia 100.4 129.3 28.9 28.70%
North America 151.8 154.0 2.2 1.50%
Middle East 11.5 13.5 2.0 17.70%
Europe 180.6 182.0 1.4 0.80%
South West Pacific 22.4 23.3 0.9 4%
Africa 3.8 4.3 0.5 13.10%
South America 52.7 52.4 -0.3 -0.60%
Capacity change by region. First half of 2012 compared to first half of 2013
Asia: Southern Asian countries fuel boom
Low-cost carriers in Indonesia (capacity up by 12.3 million seats), India (capacity up by 3.0 million seats), Thailand (capacity up by 2.0 million seats) and Malaysia (capacity up by 1.8 million) were responsible for half of total, global, LCC capacity growth. Asia showed the strongest growth rates of any region with a 28% overall increase to reach 129 million departing LCC seats in the first six months of 2013. When capital cities are examined, it is evident that capacity increases are being driven by emerging Asian nations. Jakarta saw the strongest absolute LCC capacity growth of any capital, increasing by 2.8 million seats or 44%, closely followed by Bangkok, up 1.2 million seats or 30%. In addition, the heavily developed Tokyo market also saw a significant increase in LCC seat capacity, which suggests the traditional focus on full service, could be changing.
Capital City Overall LCC share of seats 2012 Overall LCC share of seats 2013 Absolute increase in seats LCC capacity change
(millions)
Jakarta 42% 51% 2.8 44%
Bangkok 22% 26% 1.2 30%
Tokyo 2% 5% 1.1 178%
Kuala Lumpur 51% 52% 1 15%
Singapore 26% 29% 0.8 17%
Asian capital cities experiencing the greatest LCC capacity increase
Europe: a divided landscape
Europe’s 0.8% overall LCC capacity growth masks a far more complex picture: across much of Southern Europe LCCs have reduced capacity, with Madrid seeing a fall in LCC departing seat capacity of 27%, the highest of any capital city in the region. Athens and Rome also saw significant percentage decreases. This picture contrasts sharply with the situation in much of Eastern and Northern Europe where Warsaw witnessed an enormous jump in LCC capacity, up 63% year-on-year and now representing 27% of total departing capacity from the city. Istanbul and Copenhagen also saw LCC capacity increase sharply.
LCC Capacity reduction evident across Southern Europe
Capital City Overall LCC share of seats 2012 Overall LCC share of seats 2013 LCC capacity change
Madrid 21% 18% -27%
Athens 5% 5% -17%
Rome 32% 29% -13%
Three European capital cities experiencing greatest LCC capacity reduction
LCC Capacity increase evident across Northern and Eastern Europe
Capital City Overall LCC share of seats 2012 Overall LCC share of seats 2013 LCC capacity change
Warsaw 18% 27% 63%
Copenhagen 23% 28% 28%
Istanbul 25% 26% 19%
Three European capital cities experiencing greatest LCC capacity growt
London maintains its position as the world’s leading city for LCCs
On a global basis, London’s LCC seat capacity is by far the largest of any city with nearly 15 million available LCC seats. That is roughly 1.5 times the number of available seats at the next largest LCC city, Sao Paulo. However, the rates of growth occurring at Jakarta (44%) and Kuala Lumpur (15%) suggest the third and fourth placed cities may move up the top ten ranking over coming years.
City Total LCC seat capacity first half of 2012 Total LCC seat capacity first half of 2013 LCC capacity change
1. London 14,381,410 14,770,173 3%
2. Sao Paulo 10,053,159 10,751,221 7%
3. Jakarta 6,513,041 9,380,306 44%
4. Kuala Lumpur 7,116,362 8,155,005 15%
5. Las Vegas 7,556,416 7,515,394 -1%
6. Denver 7,107,811 6,905,360 -3%
7. Chicago 6,541,093 6,852,703 5%
8. Barcelona 6,681,110 6,696,157 0%
9. New York 6,325,789 6,594,414 4%
10. Manila 5,615,765 5,743,015 2%
Top 10 cities ranked by total LCC seat capacity in the first half of 2013.
Alexandre Jorre, LCC specialist, Amadeus, commented: “We see a natural boom in LCC capacity across Asia, where point-to-point air travel is largely underserved. However, across the mature markets of Europe and North America capacity is constrained, which may explain why some LCCs are considering new approaches to secure future growth.”
He continued: “With a 25% year on year rise over the first half of 2013, LCC bookings in Amadeus are growing significantly, which is a very encouraging sign that our ability to adapt to LCC distribution needs is proving attractive to both travel agents and airlines. LCCs are seizing the opportunity we offer to penetrate the high-yield business travel market and expand into new regions where they have limited brand presence. To maximize these benefits, we keep innovating, as demonstrated by the new range of light ticketing enhancements just implemented for easyJet, which keep it simple for LCCs and make it far more efficient for agents to book and service LCCs.”
Pascal Clement, Head of Travel Intelligence, Amadeus, added: “Understanding how capacity trends are changing at a detailed level is fundamental to the planning process for both airlines and airports. Deploying effective data analysis tools that can seek meaning among huge volumes of data can give companies the edge.”
Amadeus Air Traffic is part of Amadeus’ Travel Intelligence Portfolio of solutions. Based on capacity and other data sources, Amadeus Air Traffic can calculate estimates for total air passenger volume for any Origin and Destination (O&D) worldwide, including those dominated by low-cost carriers. This means airlines can plan and develop networks that respond to true passenger air traffic and meet a clear need in the market based on complete O&D data.
For further information, please see:
http://www.amadeus.com/blog/28/10/a-changing-low-cost-landscape-new-markets-new-strategies-new-customers
