The Peculiarities of Low-Cost Carrier Development in Europe

Jolanta Sabaitytė,Vida Davidavičienė,Gerard Frederick Van Kleef

doi:10.3390/en13030639

Abstract

Low-cost carriers (LCCs) have been growing by 11.4% in revenue passenger kilometers over 2017 and changed the airline industry radically. It drove down prices in the industry. Southwest Airlines (USA) designed the LCC blueprint model, and Ryanair copied it within Europe, followed by other airlines. This research aims to fulfill the gap in contemporary research upon LCC successfulness in Europe by a description of the current situation within Europe (2018 and January 2019) and the development issues it faced, which are mapped by the Ishikawa fishbone diagram. Furthermore, to rank the airlines on strength and vulnerability, The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) methodology was used for meeting LCC characteristics and airline success. By comparison of meeting the LCC characteristics and the rank of the successfulness, the results of the TOPSIS analysis showed that the airlines meeting the most LCCs characteristics are seemingly less vulnerable to the development issues that airlines are facing, as Wizz Air and Ryanair are meeting most characteristics and are the most successful. Concluded is that airlines meeting the most LCC characteristics are the least vulnerable to current issues. However, major disruptions can still form an issue and limit growth. This research can be useful for comparing and positioning airlines in the market, based on issues and operational choices.

Highlights

Low-cost carriers (LCCs) are a phenomenon that provided various people around the world access to air transportation with low prices, whereas in the past, aviation was known by its exclusivity for richer people and business travel
Analysis of the literature revealed the definition of LCCs and describes the issues faced in the airline industry, and forms a list for the main characteristics of LCCs
This research showed that the airline industry is growing quickly since 2010, as is described in the introduction, based on International Civil Aviation Organization (ICAO) (2018) in its annual report about 2017

Summary

Introduction

Low-cost carriers (LCCs) are a phenomenon that provided various people around the world access to air transportation with low prices, whereas in the past, aviation was known by its exclusivity for richer people and business travel. The airline industry has seen a big growth in its totality. The number of passengers carried in 2017 grew by 7.2%, whereas the revenue passenger kilometers (RPKs) on scheduled traffic in 2017 grew by 7.9%. Freight transport by air grew in 2017. The freight tonne kilometers (FTKs) on scheduled flights grew 9.5% [1]. The growth of the industry is ongoing since the last decline in 2009, with the number of passenger kilometers approaching 8000 billion, whereas it used to be around 4500 billion in 2009 [2]

Objectives

Methods

Results

Conclusion