Low Cost Carriers

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Juan Batista MBAA Business Research Methods ERAU

With airline deregulation and the spread of increased competition to airline markets around the world, control of operating costs and improved productivity have become critical to the profitability of airlines. The emergence and rapid growth of “low-cost” airlines is due in large part to their ability to deliver air transportation services at substantially lower costs and at higher levels of productivity than the traditional “legacy” airlines. In response, legacy airlines have had to find ways to reduce operating costs and improve the efficiency of how they utilize both their aircraft and employees.
The selected reports make reference to the low-cost airlines or LCC. The first relates to the success of this model in long-range routes (more than 800 km) also called ' Long Haul ' (Morrell, 2009), and the second aims to determine the limits to the growth of this companies (Wit, 2012).

What measure of central tendency did the authors report? What are the potential issues with each measure of central tendency? Do you agree with the author’s choice? Explain.
As explained in the second paper many low cost carriers (LCCs) continue to enjoy rapid growth and still have a fair number of new aircraft on order recently. There are signs however that the market for LCCs is limited, owing to increasing route density problems, primarily in Europe but seemingly also in North America: the fact that average frequencies have decreased and average route distances increased since 2001 indicate that LCCs are increasingly operating in exceedingly thinner niche markets. This perhaps explains why LCCs have been trying to adapt their business strategies to assure future growth by shifting to primary airports, facilitating transfers, engaging in codesharing, entering alliances, and acquiring other airlines.
I share the point of view of the author because the figures presented in this paper reveal signs of a saturating



References: Hunt, A. (2006). European Low-Cost Carriers. OAG. Morrell, P. (2009). Can long-haul low-cost airlines be successful? Research in Transportation Economics. Thomas, J. (2003). Here for the Long Haul: Low-Cost and Legacy Carriers can coesxist. L.E.K consulting. Wit, J. d. (2012). The growth limits of the low cost carrier model. Journal of Air Transport Management.

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