North American LCCs and ULCCs: time to think outside the box
LCCs operating in North America are the most mature in the world and some of the veterans, including Southwest and WestJet, are facing challenges as they work to keep costs competitive and expand revenue. Those companies are tackling headwinds in different ways.
Southwest is adopting its historically more conservative approach, whereas WestJet has arguably ripped up the LCC playbook during the past six years – launching a regional and ULCC subsidiary and taking the low cost model across the Atlantic.
The hybrid LCCs Alaska and JetBlue are also evolving, embracing the product segmentation their larger FSC peers have adopted in order to bolster their revenues and remain competitive in the marketplace. Each of those companies is also working to maximise value from its respective premium offerings while also attempting to contain costs.
The largest North American ULCCs – Spirit and Frontier – have built up a combined 6.4% US domestic market share. Spirit is enjoying a revenue and margin upswing while, for now, maintaining an impressive cost performance.
Become a CAPA Member to access Analysis Reports
Our Analysis Reports are only available to CAPA Members. CAPA Membership provides exclusive access to in-depth insights on the latest developments in the aviation and travel industry, developed by our team of dedicated analysts located in Europe, North America, Asia and Australia.
Each report offers a fresh perspective on the latest industry trends and is available online or via the CAPA mobile app, with customisable alerts to help you stay informed and identify new business opportunities.
CAPA Membership also provides access to our full suite of tools, including a tailored selection of more than 400 News Briefs every weekday and comprehensive data and analysis on thousands of companies around the world.