Geographic structure and regional socio-economic impact of low-cost airlines in selected cities of Central and Eastern Europe: the role model for Belarus.

Andrei Bezruchonak

doi:10.1051/matecconf/201823602011

Abstract

The goal of this article is to analyse the structure of geographic presence and the socio-economic impact of low-cost carriers (LCCs) in the selected countries of Central and Eastern Europe (neighbouring the Republic of Belarus – Poland, Lithuania, Latvia, Ukraine and Russia). The model of the current geographic configuration of the LCCs network from the cities and airports with the closest proximity to Belarus was designed. The current market trends show that the major LCCs on the market are Wizz Air and Ryanair, and they are increasing their share at the markets of the countries analysed (particularly after Ryanair entered Ukrainian market in 2018). The overview of socio-economic impact of LCCs is discussed with accent on the possible benefits and outcomes of LCCs entry to the Republic of Belarus.

Highlights

In chronologic and geographic dimensions, the origin of the term “low-cost carrier” (LCC)dates back to the late 1940s, tracing to the US, where the Pacific Southwest Airlines had pioneered the concept by starting operations from San Diego, CA
Statistical and analytical data on the current state of low-cost carriers (LCCs) in the EU and CEE discussed in the article is based on content analysis of open access publications and reports, provided by the following international agencies and institutions: European Parliament, World Bank, Eurostat, official data of OAG, Centre for European Policy Studies (CEPS), PwC, etc
The dynamic impact on spatial socio-economic development and effects caused by LCCs presence is complex and interrelated with all sectors of society [12]

Summary

Introduction

In chronologic and geographic dimensions, the origin of the term “low-cost carrier” (LCC)dates back to the late 1940s, tracing to the US, where the Pacific Southwest Airlines had pioneered the concept by starting operations from San Diego, CA. The Southwest Airlines had successfully developed the LCCs business model in its contemporary form after the Airline Deregulation Act of 1978. Some core features that contributed to the success of the original LCCs business model included: high aircraft utilisation; use of secondary airports; minimum cabin crew; lower wage scales; lower rates of unionisation; one class of seating; short turn-around times; simple fare structures and price strategies; adoption of strict yield management techniques; no frills; no connections; point-to-point services [1]. By practising cost leadership via significant cost cutting and improving efficiency of the overall business process, LCCs could sell tickets at prices lower than traditional carriers (up to 53 % lower) [1, 2, 3]. © The Authors, published by EDP Sciences.

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