Global Full-Service Carrier Market Grows Steadily at a CAGR of 5.05%

Introduction

Full-service carriers (FSCs), or legacy airlines or full-service airlines, are established air carriers that offer supplementary services to passengers without imposing additional charges. This stands in contrast to low-cost carriers (LCCs), which impose additional charges for all additional services. Based on the airline and flight duration, FSCs typically provide amenities such as onboard catering, baggage allowance, in-flight entertainment, seat assignment, and other comforts (blankets, travel packages, etc.). In addition, membership in loyalty programs, access to airport premium facilities, connecting flights, and multi-class service are provided by the majority of FSCs.

Market Dynamics

Rising Air Passenger Traffic Drives the Global Market

Air passenger traffic has increased significantly in the airline industry due to rising per capita income, expanding urbanization, and declining overall air travel costs. Air passenger traffic increased incrementally (comparing 2021 to 2020), primarily due to the effective COVID-19 vaccination programs in several regions, which assisted governments in easing air travel regulations. In comparison to 2019, passenger demand (revenue passenger kilometers or RPKs) decreased by 58.4% in 2021, per the International Air Transport Association (IATA). This decline depicted an enhancement compared to 2020 when RPKs for the entire year decreased by 65.8% compared to 2019.

Furthermore, total traffic in July 2023 increased by 26.2%, as measured in revenue passenger kilometers (RPKs), compared to July 2022. On a global scope, traffic has returned to pre-COVID levels by 95.6%. Globally, passenger demand will return to pre-COVID-19 levels in several significant aviation markets by 2024. Consequently, the increase in air passenger volume is anticipated to propel the market for full-service carriers throughout the forecast period.

Establishment of New Route Networks Creates Tremendous Opportunities

The expansion of route networks and the ability to accommodate a wide range of destinations can serve as a substantial impetus for full-service carriers. The capacity to establish an international footprint and offer convenient connectivity possesses the capacity to appeal to a diverse clientele. For instance, Vistara, a renowned full-service airline in India, initiated non-stop flights between Pune and Singapore in December 2022. According to the statement issued by the Gurugram-based company, the airline plans to operate flights on this particular route on a four-times-per-week basis, employing its A321neo aircraft.

Similarly, Vistara increased daily service frequencies from Delhi to Frankfurt and Paris due to the addition of a third Boeing 787-9 aircraft in November 2022. The airline has declared its intention to operate six flights weekly on the route connecting Delhi and Frankfurt while increasing the frequency to five flights per week on the route connecting Delhi and Paris. Thus, establishing new international routes will generate market opportunities for full-service carriers globally.

Regional Analysis

North America is the most significant global full-service carrier market shareholder and is expected to expand substantially during the forecast period. Air traffic in the North American region is experiencing a persistent increase. For instance, IATA reported that despite a 65.6% decline in full-year passenger traffic for North American airlines compared to 2019, the region accounted for the largest share of passenger traffic (RPK) worldwide, comprising roughly 32.6% of global RPKs. Similarly, as reported by the US Bureau of Transportation Statistics, the total number of passengers conveyed by airlines in the United States in 2021 was 674 million, reflecting an 82.5% growth rate compared to 2020 (369 million passengers). As a result, the substantial volume of air passengers will propel the market for full-service carriers.

A full-service carrier also offers diverse services and amenities to cater to many passengers. An airport must have a robust infrastructure to provide passengers with a seamless and efficient experience. Airports are getting ready to handle the expected increase in demand by making infrastructural improvements and expansions. Subsequently, there were government investments observed in the region. In March 2022, the Canadian government unveiled support packages for investments in Toronto Pearson International Airport infrastructure upgrades, including new funding for critical infrastructure projects. These expansion initiatives are anticipated to stimulate the development of the regional market.

Key Highlights

• The global full-service carrier market size was valued at USD 04 billion in 2022. It is estimated to reach 335.03 billion by 2031, growing at a CAGR of 5.05% during the forecast period (2023–2031).
• Based on services, the global full-service carrier market is divided into in-flight entertainment, checked baggage, meals, beverages, comforts, and others. 
• Based on application, the global full-service carrier market is segmented into domestic and international aviation.
• North America is the most significant global full-service carrier market shareholder and is expected to expand substantially during the forecast period.

Competitive Players

Competitive Players

The key global full-service carrier market players are Air China Limited, All Nippon Airways Co. Ltd., American Airlines, Air France, British Airways Plc (International Airlines Group), Etihad, Delta Air Lines Inc., Deutsche Lufthansa AG, Qatar Airways Company Q.C.S.C., Turkish Airlines, Emirates (The Emirates Group), United Airlines Inc., and others.

Recent Developments

Market News

• In August 2023, Vistara, a joint venture between the Tata Group and Singapore Airlines and the country's full-service airline, announced the addition of a Maldives service to its international network.
• In September 2023, The Tata Group's initiatives to consolidate Air India and Vistara into a single full-service carrier advance received recent endorsements from the Competition Commission of India and continued Air India's fleet modernization and aircrew expansion.

Segmentation

Global Full-Service Carrier Market: Segmentation

By Services

• In-flight Entertainment
• Checked Baggage
• Meals
• Beverages
• Comforts
• Other

By Applications

• Domestic Aviation
• International Aviation

By Regions

• North America
• Europe
• Asia Pacific
• Latin America
• The Middle East and Africa