The pandemic has severely hit the Airline Industry, and low-cost carriers will drive post-Covid revival. Prudent cost-cutting measures and operational responsiveness will see these planes move swiftly to seize pent-up demand and benefit from any possibilities ahead of other, high-cost standard carriers. As the fastest-growing segment of the airline industry for more than 25 years, Low Cost Airlines have extended to take a growing share of overall customer volumes even as total travel has risen every year before 2020. Each year, LCCs add more travelers than any other airline segment and helps in gaining a competitive advantage.
As we inch nearer to the end of demand shock and increasingly get numerous people vaccinated, it’s difficult not to think about what post-COVID commercial aviation could seem like. So we’d like to retort to that issue and dive a little deeper into how low-cost carriers (LCCs) will drive the demand restoration.
Low-cost carriers have cut down the fares as well
All airlines have drastically decreased airfares to endure the turmoil created by Covid-19, and it is apparent that low-cost carriers (LCCs) have driven to push already low-cost bases even lower. As a result, these carriers can now operate cash-positive routes with a lower load factor than before, which is amazingly important with the current low demand levels.
LCCs have revealed a higher degree of flexibility and adaptability to network planning and aircraft deployment. LCCs were the first off the blocks to seize any pent-up demand in the market and successfully do so. Relaxation of travel protocols in the summer and the rapid increase in capacity extended by LCCs to receive the greater pent-up demand levels showed that low-cost airlines remained nimble and flexible during the pandemic.
LCCs can thoroughly address affordability issues
The pandemic has intensified customer concerns encompassing personal finances. A survey says that a staggering 86% of respondents were ‘extremely,’ ‘quite,’ or ‘slightly’ bothered about their personal financial situation.
The low airfares proposed by LCCs will cater to the rising demand for affordability. Cost-cutting measures will allow LCCs to push airfares to new lows and still break even, dropping other carriers flying unprofitable if they prefer to compete. As a result, these airlines will hopefully gain a substantial foothold in the market due to the pandemic.
Leisure travel will rebound first
LCC’s tend to target leisure and visiting friends and family travelers, and their demand for traveling will recover faster than business travelers, a big target market for full-service airlines. The reliance on these travelers will mean LCCs will see higher uplifts in travel in the short term.
Also, the short distance, point-to-point channels offered by LCCs will better suit pandemic-cautious travelers seeking trips at closer proximity to home. As customer travel habits have changed for at least the short-term, cost-cutting and operational agility extended by many LCCs will hasten recovery. As a result, these airlines will likely emerge from the pandemic as leaner, more competitive airlines and win larger market shares.
LCC Competitive Advantage Occasions New Tech Needs
Surprisingly, the rapid and digitally-driven strategies that give LCCs a competitive advantage are also designing novel technological requirements not being met by legacy software systems. Interestingly, despite the current growth and expansion of the Low Cost Carriers sector, few vendors have dedicated sources to serving LCCs. This is necessary as LCCs have various distinct market business demands compared to other airline design’s operations.
The design of LCCs may not only be directing the restoration to demand but also might be influencing commercial aviation into a golden age of technology utterly by producing a currently unquenchable call in the market, which vendors will have no other alternative but to settle because the market opportunity will be too huge to miss.