A bird’s eye view of the Riyadh city from an aeroplane at night
The Middle East’s low-cost carrier (LCC) sector is entering a new phase of competitive maturity, reshaping regional air connectivity and creating both opportunities and challenges for the travel trade. Driven by demand for affordable travel, rapid route expansion, and supportive government aviation strategies, LCCs are now a core pillar of the region’s aviation ecosystem rather than a peripheral segment.
Strong Growth Fundamentals
The Middle East and Africa LCC market was valued at USD 5.23 billion in 2024 and is forecast to grow at a compound annual growth rate (CAGR) of 16.7% through to 2031, reaching approximately USD 16.48 billion. Growth is underpinned by rising leisure demand, price-sensitive VFR traffic, labour mobility, and the expansion of point-to-point services linking secondary and underserved cities.
Unlike Europe and North America—where the LCC model has long matured—the Middle East adopted low-cost aviation later. However, this delayed entry has allowed carriers to scale quickly, supported by modern fleets, uncongested airports, and strong infrastructure investment across the Gulf.
flydubai and salam air airplane getting ready to take off , both salam air and fly dubai are budget airlines
Route Competition Reshapes Capacity Planning
Competitive intensity is most evident on high-volume regional routes critical to the travel trade. The Cairo–Riyadh corridor remains one of the most contested markets in the region, with eight airlines currently operating. Dubai–Riyadh and Cairo–Jeddah also rank among the most competitive, reflecting the scale of Saudi Arabia–Egypt travel flows.
By contrast, long-haul trunk routes such as Dubai–London Heathrow (DXB–LHR) remain more concentrated, with only four airlines competing, underscoring how competition intensity varies sharply by route type and market segment.
According to Filip Filipov, COO of OAG, the region’s momentum shows no sign of slowing:
“The Middle East region's strategic position as a global hub, coupled with the dynamic expansion of both low-cost and network carriers, is driving unprecedented opportunities. This vibrant market is setting the stage for future advancements in aviation technology and passenger experience.”
For tour operators and OTAs, this level of competition translates into high-frequency schedules, aggressive pricing, and increased opportunities for dynamic packaging. In contrast, long-haul routes such as Dubai–London Heathrow remain more concentrated, indicating that LCC-driven competition is still largely regional rather than intercontinental.
Africa and Asia: Strategic Growth Markets
While intra–Middle East capacity continues to dominate LCC networks, Africa has emerged as a key expansion market—particularly Egypt, which acts as a central demand hub. Flyadeal allocates 96% of its African capacity to Egypt, while flynas assigns 81%. Air Arabia follows a similar strategy, with 73% of its Middle East–Africa capacity operating into the country.
For the travel trade, this reinforces Egypt’s role as a cornerstone market for religious, leisure, and VFR travel, supported by high seat availability and competitive fares.
At the same time, Asia—especially the Indian subcontinent—remains a priority growth region for flydubai and Air Arabia. Southern Asia accounts for 70% of flydubai’s total Asia capacity and 81% of Air Arabia’s, largely serving labour and VFR traffic. This traffic base offers stable, year-round demand, making it particularly attractive for wholesalers and consolidators.
Geography underpins these strategies. Low-cost carriers aim to maximise aircraft utilisation, favouring sectors of up to four hours. The Middle East’s proximity to South Asia, North Africa, and Central Asia places hundreds of commercially viable destinations within this operational range.
Airline profit growth. Increase in prices for tickets and flights. Loyalty programs and air miles, bonuses.
As competition intensifies, LCCs in the Middle East are becoming more trade-friendly. Many have expanded indirect distribution, interline partnerships, and ancillary bundling, enabling greater participation from TMCs, OTAs, and tour operators. Increased capacity on competitive routes also supports destination marketing initiatives and off-peak demand stimulation.
For the trade, the challenge lies in managing fare volatility and inventory fragmentation, while leveraging high-frequency services to build flexible, price-competitive itineraries.
Riyadh Air: A New Competitive Variable
Riyadh Air adds another strategic layer to the market. Expected to begin full commercial operations in early 2026, the airline has committed to 124 aircraft—one of the most ambitious fleet expansion programmes in recent aviation history.
While Riyadh Air is positioned as a full-service carrier rather than a pure LCC, its scale, network ambition, and government backing are expected to influence pricing, capacity deployment, and partnership dynamics across the region. Its loyalty programme, Sfeer, launched in October 2025, signals a strong focus on brand differentiation and customer retention from the outset.
For the travel trade, Riyadh Air’s entry could unlock new long-haul and connecting opportunities via Riyadh, while intensifying competition on regional routes currently dominated by LCCs and hybrid carriers.
Partnerships with the travel trade
The Middle East LCC market is transitioning from rapid expansion to strategic optimisation. Cost leadership alone is no longer sufficient; network breadth, distribution reach, ancillary revenue strategies, and partnerships with the travel trade are becoming decisive competitive factors.
For tour operators, OTAs, and corporate travel buyers, the evolving landscape offers greater choice, more competitive pricing, and expanded access to emerging destinations. As capacity continues to grow and new players enter the market, collaboration between airlines and the travel trade will be critical to unlocking sustainable, long-term value.
