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Mapping causalities of airline dynamics in long-haul air transport markets

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  • Urban, Marcia
  • Hornung, Mirko

Abstract

The introduction of low-cost air transport services to short-haul routes has significantly shaped the structure of this market segment. Recent research investigates and discusses the transferability of the low-cost carrier business model to long-haul routes and identifies respective challenges such as lower cost advantages over the competing full-service network business model. Our paper complements the existing research with a review of airline dynamics in long-haul air transport markets and the subsequent development of a causal loop diagram of the transatlantic air transport market using systems thinking. The objective of this paper is to provide an overview of specific characteristics regarding airline operations in the transatlantic air transport market to investigate the market potential of long-haul low-cost carriers competing with full-service network carriers in this market. We implement these characteristics in a causal loop diagram which comprises the most important elements of and causalities within the long-haul air transport market that affect the development of these elements. These include the generation of transatlantic air transport demand, passenger choice, and airline ticket price and fleet development. The causal loop diagram serves as a framework for qualitative investigation of the market potential of long-haul low-cost services. The paper proves systems thinking to be a feasible approach to map causalities based on knowledge from scientific literature.

Suggested Citation

  • Urban, Marcia & Hornung, Mirko, 2021. "Mapping causalities of airline dynamics in long-haul air transport markets," Journal of Air Transport Management, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:jaitra:v:91:y:2021:i:c:s0969699720305561
    DOI: 10.1016/j.jairtraman.2020.101973
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    References listed on IDEAS

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    1. Wensveen, John G. & Leick, Ryan, 2009. "The long-haul low-cost carrier: A unique business model," Journal of Air Transport Management, Elsevier, vol. 15(3), pages 127-133.
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    6. De Poret, M. & O'Connell, J.F. & Warnock-Smith, D., 2015. "The economic viability of long-haul low cost operations: Evidence from the transatlantic market," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 272-281.
    7. Hunt, Jennifer & Truong, Dothang, 2019. "Low-fare flights across the Atlantic: Impact of low-cost, long-haul trans-Atlantic flights on passenger choice of Carrier," Journal of Air Transport Management, Elsevier, vol. 75(C), pages 170-184.
    8. Soyk, Christian & Ringbeck, Jürgen & Spinler, Stefan, 2018. "Revenue characteristics of long-haul low cost carriers (LCCs) and differences to full-service network carriers (FSNCs)," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 112(C), pages 47-65.
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    11. Wilken, Dieter & Berster, Peter & Gelhausen, Marc C., 2016. "Analysis of demand structures on intercontinental routes to and from Europe with a view to identifying potential for new low-cost services," Journal of Air Transport Management, Elsevier, vol. 56(PB), pages 79-90.
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