Low Cost Carrier Market Share

Rising disposable income and the continuous regional economic growth are key drivers behind the escalating air passenger traffic across the region. The introduction of new-generation aircraft to replace aging fleets is poised to further propel the growth of the aerospace and defense market over the forecast period. Airline operators in the region are actively offering discounts on airfares as part of various promotional schemes, enhancing customer attraction. Notably, airlines like GoAir, AirAsia India, and IndiGo announced seasonal discount schemes in India, contributing to the rising demand fueled by the availability of low-cost travel options and the increasing presence of low-cost carriers.

Expanding production facilities are expected to drive heightened aircraft deliveries in the upcoming years. For instance, Boeing delivered its first 737 MAX airliner to Air China in December 2018, marking a significant step in enhancing regional air connectivity. Moreover, the launch of new flights by Japan Airlines between Tokyo Haneda (HND) and Manila utilizing Boeing 737-800 in February 2019 further bolsters regional connections.

The increasing demand for business jets in Asia Pacific is a promising opportunity for the low-cost carrier (LCC) market. In 2017, the region witnessed a rise in business jets to 1,182 aircraft, a 2.3% increase compared to the previous year, indicating the potential for LCC market growth. Notably, AirAsia Group’s addition of 24 new aircraft in 2017 has notably addressed the burgeoning air passenger traffic across the region.

Strategic investments by domestic aircraft components’ manufacturers and expansions of production facilities are set to augment the penetration of the low-cost carrier (LCC) market. Notably, Sigma Components Ltd.'s investment of over USD 1 million in a new manufacturing facility in Chengdu, China, aimed at meeting the increasing demand for rigid ducting from Rolls-Royce for XWB engines, signifies a proactive approach to cater to market needs. Additionally, the establishment of strategic joint ventures among industry participants and part manufacturers, such as Eaton's joint venture with Shanghai Aircraft Manufacturing Co. (SAMC), has gained approvals from major aviation authorities (EASA, FAA, and CAAC) to provide ducting maintenance, repair, and overhaul (MRO) services across the region, reinforcing the LCC market growth prospects.