Development Of Low-cost Carriers Research Articles

The border effect in European air transport

This article deals with the analysis of the border effect in European air transport. The border effect measures how trade or transport flows are diminished when they cross a national border. This topic has attracted a great deal of attention within trade, but it is still little studied within transport. Existing studies have estimated that the border effect diminished air passenger transport flows by a factor of five to six. However, there have been many changes in the European economy and transport since those studies. Our estimate based on a new data set suggested the existence of a border effect in European passenger air traffic flows, albeit with a lower value of around two. A possible reason for the lower value is the growing integration of the European economy and the development of low-cost carriers in Europe between 2000 and 2019. Our econometric analysis also found differences in border effects among European countries. No significant border effect was detected for France, but we did find high and significant effects for Germany, Spain, and Poland. These differences can be attributed to different intensities of intermodal competition on domestic routes.

Low cost carriers in the Middle East and North Africa (MENA) region: Emergence and barriers to development

This paper investigates the development of low cost carriers (LCCs) in the Middle East and North Africa (MENA) region from a broader perspective. We use passenger volume data at the airline and flight segment levels to illustrate the development of LCCs in the region; we conduct a structured comparison of the actual business model characteristics of the MENA-based LCCs to assess their adherence to the archetypical LCC business model; and we compile the key barriers to LCC growth in MENA from the literature.We find that the overall market share of LCCs in MENA is still below the world average – despite high growth in recent years. The presence of LCCs varies considerably between MENA countries and route groups. The more upscale, “Jetblue”-style business model, where passengers benefit from additional, complementary services or product characteristics, prevails. Political tensions, adverse regulations and lower levels of liberalization compared to Europe or North America negatively affect LCC development in many MENA countries. While low middle-class proportions appear to be a challenge for low cost business models, Asian diaspora and tourism – from beach holidays to pilgrimage – seem to induce additional demand.

지역통합과 항공자유화의 진전 : EU와 ASEAN의 저비용항공발전

지역통합과 항공자유화의 진전 : EU와 ASEAN의 저비용항공발전

The Positive Impact of Macau Low-cost Carriers to Enhance Regional Tourism Economy

It is certainly that Low-cost carriers could come out during the time tourism being popularized. Also it is a way that being used to occupy market shares and increase purchase rate among potential customers. Meanwhile, the development of low-cost carriers is changing the segment market and direction in air industry by re-integration the function of regional tourism, cooperate and segregate in tourist destination. It becomes a trend as complementary development between low-cost carriers and tourism industry. In the future, we should focus on building an entire low-cost carriers tourism system, improving low-cost carriers’ specialized products, in order to meet win-win requirement among low-cost carriers and regional tourism.

Flying for a Buck or Two: Low-Cost Carriers in Australia and New Zealand

Over the past few decades, the traditional aviation market has seen significant developments.Traditional “legacy“ carriers have been challenged by new no/low-frills, low cost carriers. While these new airlines have a relatively long history in North America, more recently they successively emerged in markets such as Europe, Asia, Oceania and Africa. The business model of low cost carriers has revolutionized air travel, and both media and academics paid ample attention to these in America and Europe. However, academic literature pertaining to the development of low cost carriers in Australia and New Zealand is scarce. Thus, this paper offers a brief history of low cost carriers in this region, and compares the business models of low cost carriers currently operating in and between Australia and New Zealand. The paper concludes that low cost carriers in this region differ from American and European low cost carriers, in part due to the geography of the countries. The main differences are the levels of in-flight service, and the fact that Australian and New Zealand low cost carriers operate on longer distances, such as coast-to- coast domestic flights in Australia, trans-Tasman flights, and flights to the South Pacific islands, and increasingly to Asia.

The Positive Impact of Macau Low-Cost Carriers to Enhance Regional Tourism Economy

It is certainly that Low-cost carriers could came out during the time tourism being popularized. Also it is a way that being used to occupy market shares and increase purchase rate among potential customers. Meanwhile, the development of low-cost carriers is changing the segment market and direction in air industry by re-integration the function of regional tourism, cooperate and segregate in tourist destination. It becomes a trend as complementary development between low-cost carriers and tourism industry. In the future, we should focus on building an entire lowcost carriers tourism system, improving low-cost carriers’ specialized products, in order to meet win-win requirement among low-cost carriers and regional tourism.

The effect of LCCs operations and scheduled services deregulation on air charter business in Japan

Recent aviation deregulation is producing structural changes within leisure industries in many parts of the world. This paper reviews the development of low cost carriers (LCCs) and assesses its effects on both of domestic and international charter markets in Japan since 2007. Furthermore, this paper analyzes the effect of scheduled services deregulation on international tourism to Japanese regional areas in relation to charter services. The results suggest that in the domestic market, LCC operations have seldom impacted charter traffic due to the differences in target markets and routes. In the international market, LCCs launched scheduled services to Japan but mainly on high demand routes. The deregulation of scheduled services led to a passenger shift from charters to newly scheduled flights and a concentration of tourist arrivals in regional centres. It also led to a decline in international tourist arrivals in some remote destinations. This paper indicates a current trend in which charter business is still an important sector in aviation and leisure markets.

Roles of Motivation and Destination Image in Predicting Tourist Revisit Intention: A Case of Bandung – Indonesia

The significant growth of new tourism destinations and the development of low cost carriers make the competition in this industry become more intense. Revisit intention has been recognized as one of the essential factor for business survival and growth in tourism industry. There are various factors that influence tourist to revisit a destination among them are destination image and motivation. The purpose of this study is to examine empirically the influence of destination image and motivation on tourist satisfaction, and revisit intention. This paper describes a theoretical model for investigating the influence of motivation, destination image on satisfaction, and revisit intention. Based on the theoretical model, hypotheses were formulated. The primary data were collected from the respondents which consists of 268 visitors. Multiple regression and qualitative analysis were used to test the study hypotheses. The study result reveals that destination image and motivation influenced tourist satisfaction and satisfaction directly influenced revisit intention. The outcomes of the study have significant managerial implications for destination marketing managers.

A Comparative Study on Evaluating the Service Quality Attributes based on Kano Model: A Case of Low-cost Carrier and Full-service Carrier

The emergence and development of low-cost carriers(LCC) with competitive price is heating up the competition in the aviation market more, especially between low-cost carriers(LCC) and full-service carriers(FSC). Therefore, it became more important than ever to implement service differentiation strategies of each airline for securing customers and competitiveness. In this sense, the purpose of this study is to compare and assess the different expectations of the customers for airline service attributes pursued by FSCs and LCCs. Three main dimensions of airline service quality attributes (physical, human, and system service), were selected and this study clarified the service quality attributes of each airline carrier using Kano Model. Data were collected from Korean passengers who experienced both LCCs and FSCs for international or domestic flights. As results, this study demonstrated several differences in airline service quality attributes between FSCs and LCCs, which imply that each airline needs to adopt differential strategies to be more competitive. In particular, most physical-related attributes for FSCs were a ‘must-be’ dimension while the majority of attributes for LCCs was clarified ‘one-dimensional’ attribute. The current study also presented implications to be helpful in developing the quality of service and establishing marketing strategies for improvement in customer satisfaction.

What role will hubs play in the LCC point-to-point connections era? The Spanish experience

Airport systems organized spatially as hub-and-spoke systems where traditional airlines (Full-Service Network Carriers – FSNCs) dominate have been impacted by the continuing expansion of Low-Cost Carriers (LCCs) in mainly point-to-point connection systems. Using a methodology based on linear transfer function models, the objective of this paper is to reflect on the future of hubs and on whether their role as large geographical air transport nodes is in doubt. Although Spanish hubs have continued to strengthen their position of dominance, the consequences of this enforced coexistence has manifested itself in a substitution effect, with LCCs replacing FSNCs at the hubs for international, primarily intra-European, flights. The market for national flights, however, has not experienced any significant changes as this new development of LCCs in this market is fundamentally based on new demand from both new passengers and the greater travel frequency of current passengers. There is also room for complementarity between the two models, as national connections with LCC hubs feed long-distance destinations exploited solely by the FSNCs.

BUSINESS RELATIONS BETWEEN THE LOW COST CARRIERS AND AIRPORTS AS A CONSEQUENCE OF THE AIR TRANSPORT DEREGULATION

The deregulation of air transport has increased competition between air carriers, resulting in lower fares and increased volumes of passengers. Subsequently, the fare reduction has altered the market structure with the establishment of new carriers, strategic alliances and mergers, and the bankruptcy of several traditional airlines which were unable to adapt to the new environment. The emergence of low cost carriers (LCCs) is one important outcome of the deregulation. LCCs entered the market by offering a differentiated product based on bare services offered at significantly lower prices. The main target was travelers with increased sensitivity in pricing and less demand for all-around services. The rise in terms of passengers and flights dictated a better utilization of the fleet, requiring reduced turnaround times at airports. Many central airports had very little flexibility and capacity necessary to facilitate additional timeslots. As an answer to inadequate capacity combined with higher taxes and fees, most LCCs have chosen to use secondary or regional airports. This choice has altered the balance and strategic importance between airports and increased their importance for air carriers. This paper examines the evolution and development of LCCs globally, along with the consequences of their expansion to the traditional carriers, the market and the passengers. Emphasis is given to the relationship between LCCs and airports which has resulted in an additional increase in air travel. The prospects of Greece as a market for LCCs are also being discussed.

DEVELOPMENT STATUS AND PROSPECTS FOR AVIATION HUBS — A COMPARATIVE STUDY OF THE MAJOR AIRPORTS IN SOUTH-EAST ASIA

This paper benchmarks the key performance measures of the hub airports in Southeast Asia. Our investigation suggests that (1) Hong Kong has been a leader in terms of network connectivity, traffic growth, hub airline developments, and cargo logistics. (2) Bangkok airport's growth has been constrained by political instability and weak hub airline development; in the long-run, the airport, however, has great potential. (3) The development of low-cost carriers have become a major driver for traffic growth, but the implications to airport connectivity have been unclear. (4) Despite limited progress on regional liberalization, intra-Asian routes have clearly contributed to traffic growth and hub airport connectivity. (5) Governments should safeguard airline competition by promoting market liberalization and airport capacity investments.

Flying for a buck or two: Low-cost Carriers in Australia and New Zealand

Over the past few decades, the traditional aviation market has seen significant developments. Traditional “legacy“ carriers have been challenged by new no/low-frills, low cost carriers. While these new airlines have a relatively long history in North America, more recently they successively emerged in markets such as Europe, Asia, Oceania and Africa. The business model of low cost carriers has revolutionized air travel, and both media and academics paid ample attention to these in America and Europe. However, academic literature pertaining to the development of low cost carriers in Australia and New Zealand is scarce. Thus, this paper offers a brief history of low cost carriers in this region, and compares the business models of low cost carriers currently operating in and between Australia and New Zealand. The paper concludes that low cost carriers in this region differ from American and European low cost carriers, in part due to the geography of the countries. The main differences are the levels of in-flight service, and the fact that Australian and New Zealand low cost carriers operate on longer distances, such as coast-to-coast domestic flights in Australia, trans-Tasman flights, and flights to the South Pacific islands, and increasingly to Asia.

Air Transport Liberalization and Its Impacts on Airline Competition and Air Passenger Traffic

Abstract This study examines the impacts of air transport liberalization policies on economic growth, traffic volume, and traffic flow patterns, and investigates the mechanisms leading to those changes. Our investigation concludes that (1) liberalization has led to substantial economic and traffic growth. Such positive effects are mainly due to increased competition and efficiency gains in the airline industry, as well as positive externalities to the overall economy; (2) liberalization allows airlines to optimize their networks within and across continental markets. As a result, traffic flow patterns will change accordingly. Strategic alliance is a second-best solution and will have a reduced role when foreign ownership restrictions are relaxed; (3) there is a two-way relationship between the expansion of low-cost carriers (LCCs) and liberalization. The rapid growth of LCCs leads to increased competition and stimulated traffic, calling for the removal of restrictions on capacity, frequency, pricing and entry. In addition, development of LCCs in domestic markets can promote liberalization policy for international aviation by increasing the competitiveness of the national aviation industry. On the other hand, the existing regulations hindered the growth of LCCs. Further liberalization is needed for the full realization of associated benefits.

Air Transport Liberalization and Its Impacts on Airline Competition and Air Passenger Traffic

Abstract This study examines the impacts of air transport liberalization policies on economic growth, traffic volume, and traffic flow patterns, and investigates the mechanisms leading to those changes. Our investigation concludes that (1) liberalization has led to substantial economic and traffic growth. Such positive effects are mainly due to increased competition and efficiency gains in the airline industry, as well as positive externalities to the overall economy; (2) liberalization allows airlines to optimize their networks within and across continental markets. As a result, traffic flow patterns will change accordingly. Strategic alliance is a second-best solution and will have a reduced role when foreign ownership restrictions are relaxed; (3) there is a two-way relationship between the expansion of low-cost carriers (LCCs) and liberalization. The rapid growth of LCCs leads to increased competition and stimulated traffic, calling for the removal of restrictions on capacity, frequency, pricing and entry. In addition, development of LCCs in domestic markets can promote liberalization policy for international aviation by increasing the competitiveness of the national aviation industry. On the other hand, the existing regulations hindered the growth of LCCs. Further liberalization is needed for the full realization of associated benefits.

Low-cost carriers in Asia: Deregulation, regional liberalization and secondary airports

While the demand for low-cost air transportation is potentially huge in Asia, development of low-cost carriers (LCCs) lags behind the region's overall aviation development, and certainly lags behind the LCC development in North America and Europe. It has been noted that market conditions and the regulatory environment of Asia are different from those of North America and Europe. What are the main differences here; and how do these differences impact market entry and success of Asian LCCs? This paper describes salient features of Asian LCCs and their developments. It examines the impact of Asia's domestic and international airline regulations and airport infrastructure on the performance of its LCCs. We find that the “Southwest effect” may also exist in Asia and that the development of low-cost terminals may compensate, at least partly, the scarcity of secondary airports in the region. The experiences of Thailand and China are investigated as case studies.