Grounded: characterising the market exit of European low cost airlines
journal contributionposted on 18.09.2013, 10:24 by Lucy Budd, Graham Francis, Ian M. Humphreys, Stephen Ison
The aim of this paper is to undertake a comprehensive study of LCC market entry and exit in Europe between 1992 and 2012. In the 20 year period between 1992 and 2012, 43 low cost carriers (LCCs) have taken advantage of the progressive liberalisation of the European aviation market and commenced scheduled flight operations within the continent. Of these 43, only 10 remain operational, a failure rate of 77%. This paper contributes to extant literature on LCCs by examining the market entry, business practices, operating longevity and fate of failed operators to characterise European LCC market exit. Drawing on the findings of a detailed continental-wide study, the paper identifies that an airline’s start-up date, the nature and size of its operation and the size and composition of its aircraft fleet are key factors which influence LCC success and failure. The implications for both European and emerging LCC markets are discussed.
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