Budget carriers set to outperform rivals

Low-cost airlines in the Middle East will outperform their legacy rivals in 2009, according to global aviation bodies.

The International Air Transport Association (IATA) believes tougher economic conditions and lower fuel prices will encourage more passengers to travel on budget carriers.

High demand for low-cost services amid the economic downturn is also forecast by the International Civil Aviation Organisation (ICAO). 

A news analysis report published on the Centre for Asia Pacific Aviation (CAPA) revealed ICAO and IATA’s predictions for the low-cost sector.  

The report said that budget airlines focusing on organic growth via fleet and network expansion will create a “shift in the balance of world aviation”. It also stated that low-cost carriers (LCCs) operating A330s are virtually “assured” growth.

A spokesperson for CAPA added: “The world’s efficient and focused LCCs will successfully press home their cost advantages in 2009 against their retreating full service counterparts in short-haul and some medium-haul markets,” the report said.

In mid-2008, IATA said low-cost airlines were vulnerable to extreme fuel prices as oil reached $147 a barrel. But the organisation soon backtracked when demand among premium carriers dropped.  

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