Revenue characteristics of long-haul low cost carriers (LCCs) and differences to full-service network carriers (FSNCs)

Abstract

Low cost carriers (LCC) have smaller cost advantages on the long- than on the short-haul compared to network carriers (FSNCs). Hence, revenue competitiveness is critical. To evaluate long-haul LCC performance, this paper contributes a new metric for bench-marking the revenue per equivalent flight capacity. Second, a revenue model combining traffic, fare, load factor, and seat data is developed. Third, the revenue per flight capacity is evaluated across selected city-pairs. Long-haul LCCs earn revenue per flight capacity comparable to FSNCs. Lower direct yields compensated by fewer low-yield connecting passengers and significantly more passengers per aircraft have been identified as key factors.