Chapter 3 - Follow the Leaders: Pioneers in the Development of Budget Airlines

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Today's global low-cost carrier (LCC) phenomenon has its roots in a handful of airlines formed in the years just after the World War II including Pacific Southwest Airlines (PSA) in California and Loftleidir in Iceland. Operating outside of otherwise tightly regulated postwar airline markets, these carriers pioneered elements of the LCC model. The most influential early LCC (and the largest today) has been Southwest Airlines, which began flying on intra-Texas routes in the early 1970s. The chapter traces the subsequent diffusion of LCCS to markets in most part of the world. The cost advantage of LCCs like Southwest in advanced markets has eroded somewhat; but in some emerging markets, budget airlines have a sizeable edge over often state-owned full-service network carriers.