In search of sustainable strategies for low-cost long-haul airlines

Abstract

This paper explores whether some guiding principles exist to make the low-cost long-haul airline model work (LCLH). Few airlines using the LCLH model have survived, raising questions about the transferability of the low-cost model to long-haul operations. The article contributes by bringing together strategic thinking and various characteristics of past LCLH attempts. The findings suggest that LCLH airlines should seek cost advantages through optimum stage lengths by employing a hub strategy; to facilitate self-connections of relevant customer segments by reducing passengers' perceived connection risk; to operate efficient single-type aircraft on underserved routes at fares that stimulate the “Southwest Effect”; and to optimize productivity through flexible operations. Achieving and maintaining a fragile cost model like LCLH requires innovation, clear trade-off decisions to sustain fit, managed growth, and a competent workforce that cements the high fit needed.