Low-cost carriers spend less per seat-mile but also earn less, and the gap between the two carrier types' pooled unit margins cannot be told apart from zero.
What this shows: The chart covers 1995 Q1 to 2025 Q3. It plots Legacy carriers and Low-cost carriers (LCC) on a vertical axis of Unit margin (¢ per available seat-mile). Latest values: Legacy carriers 1.36; Low-cost carriers (LCC) -0.31. Data run through 2025 Q3.
Conditions and method
Status: inconclusive (the interval on the gap between the two carrier types’ pooled margins includes zero, so the data cannot say which type earns the higher margin).
The 95% interval on the low-cost pooled margin less the legacy one runs from -0.71 to 0.41 cents per seat-mile, which includes zero, so the two pooled margins cannot be told apart.
Unit margin is profit per seat-mile, not total profit. It covers US carriers only. Revenue and cost cover all of a carrier’s flying; seat-miles cover scheduled service on aircraft with at least 50 seats, so the margin mixes two scopes slightly.