How do Low Cost Carriers perform in times of crisis? The last 40 years have produced 6 crises with an average expansionary economic cycle requiring 6 years. The last malaise, the financial crisis, is now approaching a 7-year slump with growing concern that the global recovery is running out of chances. One of the deepest global recessions in history is showing us a different kind of recovery under continued global instability. The lingering weakness of the developed world has also increasingly worn on emerging economies, which in the last decade have been a breeding ground for low-cost carriers (LCC). In fact, emerging economies have remained more reliant on external demand to keep their economic engines humming.
With the global airline industry reporting billions in losses in 2008-2009, the crisis begged the question how low-cost carriers were affected and how they coped with a drastically changing trading climate. In
more mature aviation markets, such as North America and Europe, low-cost carriers were facing a multitude of challenges as their growth appeared to saturate with ever-increasing unit costs. So how did they do? Were they badly impacted much like the rest of the industry? And were they equally hurt as full-service network airlines such as Air France, KLM, Lufthansa, British Airways? Moreover, how long did it take to recover?