IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v81y2015icp141-157.html
   My bibliography  Save this article

The impact of low-cost carriers on airport choice in the US: A case study of the Washington–Baltimore region

Author

Listed:
  • Cho, Woohyun
  • Windle, Robert J.
  • Dresner, Martin E.

Abstract

Previous research has shown that low-cost carriers (LCCs) may stimulate traffic at an airport by offering low fares. Using passenger survey data from the Washington–Baltimore region’s three airports, we find that the benefits of LCCs to airports extend beyond the traffic generated directly by the LCCs through their low fares. In addition, we find that the mere presence of an LCC at an airport can attract passengers, even to competing carriers. These “halo effects” from LCC presence increase the significance to airport managers of attracting LCCs in order to generate passenger demand.

Suggested Citation

  • Cho, Woohyun & Windle, Robert J. & Dresner, Martin E., 2015. "The impact of low-cost carriers on airport choice in the US: A case study of the Washington–Baltimore region," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 81(C), pages 141-157.
    • Handle: RePEc:eee:transe:v:81:y:2015:i:c:p:141-157
    DOI: 10.1016/j.tre.2015.06.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S136655451500126X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2015.06.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Coldren, Gregory M. & Koppelman, Frank S. & Kasturirangan, Krishnan & Mukherjee, Amit, 2003. "Modeling aggregate air-travel itinerary shares: logit model development at a major US airline," Journal of Air Transport Management, Elsevier, vol. 9(6), pages 361-369.
    2. Loo, Becky P.Y., 2008. "Passengers’ airport choice within multi-airport regions (MARs): some insights from a stated preference survey at Hong Kong International Airport," Journal of Transport Geography, Elsevier, vol. 16(2), pages 117-125.
    3. Marcucci, Edoardo & Gatta, Valerio, 2011. "Regional airport choice: Consumer behaviour and policy implications," Journal of Transport Geography, Elsevier, vol. 19(1), pages 70-84.
    4. Eric Pels & Peter Nijkamp & Piet Rietveld, 2001. "Airport and Airline Choice in a Multiple Airport Region: An Empirical Analysis for the San Francisco Bay Area," Regional Studies, Taylor & Francis Journals, vol. 35(1), pages 1-9.
    5. Basar, Gözen & Bhat, Chandra, 2004. "A parameterized consideration set model for airport choice: an application to the San Francisco Bay Area," Transportation Research Part B: Methodological, Elsevier, vol. 38(10), pages 889-904, December.
    6. de Luca, Stefano, 2012. "Modelling airport choice behaviour for direct flights, connecting flights and different travel plans," Journal of Transport Geography, Elsevier, vol. 22(C), pages 148-163.
    7. Proussaloglou, Kimon & Koppelman, Frank S., 1999. "The choice of air carrier, flight, and fare class," Journal of Air Transport Management, Elsevier, vol. 5(4), pages 193-201.
    8. Ishii, Jun & Jun, Sunyoung & Van Dender, Kurt, 2009. "Air travel choices in multi-airport markets," Journal of Urban Economics, Elsevier, vol. 65(2), pages 216-227, March.
    9. Hess, Stephane & Adler, Thomas & Polak, John W., 2007. "Modelling airport and airline choice behaviour with the use of stated preference survey data," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(3), pages 221-233, May.
    10. Chiou, Yu-Chiun & Chen, Yen-Heng, 2010. "Factors influencing the intentions of passengers regarding full service and low cost carriers: A note," Journal of Air Transport Management, Elsevier, vol. 16(4), pages 226-228.
    11. Gillen, David & Lall, Ashish, 2004. "Competitive advantage of low-cost carriers: some implications for airports," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 41-50.
    12. Yang, Chih-Wen & Lu, Jin-Long & Hsu, Chun-Yen, 2014. "Modeling joint airport and route choice behavior for international and metropolitan airports," Journal of Air Transport Management, Elsevier, vol. 39(C), pages 89-95.
    13. Nikos Tsikriktsis, 2007. "The Effect of Operational Performance and Focus on Profitability: A Longitudinal Study of the U.S. Airline Industry," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 506-517, April.
    14. O’Connell, John F. & Williams, George, 2005. "Passengers’ perceptions of low cost airlines and full service carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines," Journal of Air Transport Management, Elsevier, vol. 11(4), pages 259-272.
    15. Shannon W. Anderson & L. Scott Baggett & Sally K. Widener, 2009. "The Impact of Service Operations Failures on Customer Satisfaction: Evidence on How Failures and Their Source Affect What Matters to Customers," Manufacturing & Service Operations Management, INFORMS, vol. 11(1), pages 52-69, November.
    16. Suzuki, Yoshinori, 2007. "Modeling and testing the "two-step" decision process of travelers in airport and airline choices," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(1), pages 1-20, January.
    17. Cohas, François J & Belobaba, Peter P & Simpson, Robert W, 1995. "Competitive fare and frequency effects in airport market share modeling," Journal of Air Transport Management, Elsevier, vol. 2(1), pages 33-45.
    18. Pels, Eric & Njegovan, Nenad & Behrens, Christiaan, 2009. "Low-cost airlines and airport competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(2), pages 335-344, March.
    19. Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Access to and competition between airports: a case study for the San Francisco Bay area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(1), pages 71-83, January.
    20. Windle, Robert & Dresner, Martin, 1999. "Competitive responses to low cost carrier entry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 35(1), pages 59-75, March.
    21. Barrett, Sean D., 2004. "How do the demands for airport services differ between full-service carriers and low-cost carriers?," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 33-39.
    22. Vowles, Timothy M., 2001. "The “Southwest Effect†in multi-airport regions," Journal of Air Transport Management, Elsevier, vol. 7(4), pages 251-258.
    23. Hess, Stephane & Polak, John W., 2005. "Mixed logit modelling of airport choice in multi-airport regions," Journal of Air Transport Management, Elsevier, vol. 11(2), pages 59-68.
    24. Johnson, Daniel & Hess, Stephane & Matthews, Bryan, 2014. "Understanding air travellers' trade-offs between connecting flights and surface access characteristics," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 70-77.
    25. Steven A. Morrison, 2001. "Actual, Adjacent, and Potential Competition Estimating the Full Effect of Southwest Airlines," Journal of Transport Economics and Policy, University of Bath, vol. 35(2), pages 239-256, May.
    26. Hess, Stephane, 2010. "Evidence of passenger preferences for specific types of airports," Journal of Air Transport Management, Elsevier, vol. 16(4), pages 191-195.
    27. Michael D. Whinston & Scott C. Collins, 1992. "Entry and Competitive Structure in Deregulated Airline Markets: An Event Study Analysis of People Express," RAND Journal of Economics, The RAND Corporation, vol. 23(4), pages 445-462, Winter.
    28. Hess, Stephane & Polak, John W., 2006. "Exploring the potential for cross-nesting structures in airport-choice analysis: A case-study of the Greater London area," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(2), pages 63-81, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lu, Jing & Meng, Yucan & Timmermans, Harry & Zhang, Anming, 2021. "Modeling hesitancy in airport choice: A comparison of discrete choice and machine learning methods," Transportation Research Part A: Policy and Practice, Elsevier, vol. 147(C), pages 230-250.
    2. Xiaoqian Sun & Sebastian Wandelt & Mark Hansen, 2020. "Airport Road Access at Planet Scale using Population Grid and Openstreetmap," Networks and Spatial Economics, Springer, vol. 20(1), pages 273-299, March.
    3. Bettini, Humberto F.A.J. & Silveira, José Maria F.J. & Oliveira, Alessandro V.M., 2018. "Estimating strategic responses to the march of a low cost carrier to primary airports," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 109(C), pages 190-204.
    4. Cho, Woohyun & Windle, Robert J. & Dresner, Martin E., 2017. "The impact of operational exposure and value-of-time on customer choice: Evidence from the airline industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 455-471.
    5. Soyk, Christian & Ringbeck, Jürgen & Spinler, Stefan, 2017. "Long-haul low cost airlines: Characteristics of the business model and sustainability of its cost advantages," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 215-234.
    6. Bezerra, George C.L. & Gomes, Carlos F., 2020. "Antecedents and consequences of passenger satisfaction with the airport," Journal of Air Transport Management, Elsevier, vol. 83(C).
    7. Teixeira, Filipe Marques & Derudder, Ben, 2021. "Spatio-temporal dynamics in airport catchment areas: The case of the New York Multi Airport Region," Journal of Transport Geography, Elsevier, vol. 90(C).
    8. Cho, Woohyun & Dresner, Martin E., 2018. "The impact of a baggage fee waiver on airline choice: Evidence from the Washington-Baltimore region," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 4-17.
    9. Xiaowei Tang & Siyu Ren & Xinyao Ma & Kurt Fuellhart, 2022. "Borrowing Power from Potential Entrants and High-Speed Rail: Entry Pattern of China’s Low-Cost Carrier," Sustainability, MDPI, vol. 14(10), pages 1-16, May.
    10. Julie Cidell, 2017. "Aero-automobility: getting there by ground and by air," Mobilities, Taylor & Francis Journals, vol. 12(5), pages 692-705, September.
    11. Cho, Woohyun & Min, Dong-Jun, 2018. "Longitudinal examination of passenger characteristics among airline types in the US," Journal of Air Transport Management, Elsevier, vol. 72(C), pages 11-19.
    12. Li, Tao & Wan, Yan, 2019. "Estimating the geographic distribution of originating air travel demand using a bi-level optimization model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 131(C), pages 267-291.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. de Luca, Stefano, 2012. "Modelling airport choice behaviour for direct flights, connecting flights and different travel plans," Journal of Transport Geography, Elsevier, vol. 22(C), pages 148-163.
    2. Escobari, Diego, 2017. "Airport, airline and departure time choice and substitution patterns: An empirical analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 198-210.
    3. Fuellhart, Kurt & O’Connor, Kevin & Woltemade, Christopher, 2013. "Route-level passenger variation within three multi-airport regions in the USA," Journal of Transport Geography, Elsevier, vol. 31(C), pages 171-180.
    4. Yang, Chih-Wen & Lu, Jin-Long & Hsu, Chun-Yen, 2014. "Modeling joint airport and route choice behavior for international and metropolitan airports," Journal of Air Transport Management, Elsevier, vol. 39(C), pages 89-95.
    5. Evangelinos, Christos & Staub, Nelly & Marcucci, Edoardo & Gatta, Valerio, 2021. "The impact of airport parking fees on the tourist's airport/airline choice behavior," Journal of Air Transport Management, Elsevier, vol. 90(C).
    6. Cho, Woohyun & Windle, Robert J. & Dresner, Martin E., 2017. "The impact of operational exposure and value-of-time on customer choice: Evidence from the airline industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 455-471.
    7. Teixeira, Filipe Marques & Derudder, Ben, 2021. "Spatio-temporal dynamics in airport catchment areas: The case of the New York Multi Airport Region," Journal of Transport Geography, Elsevier, vol. 90(C).
    8. Lieshout, Rogier, 2012. "Measuring the size of an airport’s catchment area," Journal of Transport Geography, Elsevier, vol. 25(C), pages 27-34.
    9. Paliska, Dejan & Drobne, Samo & Borruso, Giuseppe & Gardina, Massimo & Fabjan, Daša, 2016. "Passengers' airport choice and airports' catchment area analysis in cross-border Upper Adriatic multi-airport region," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 143-154.
    10. Kim, Amy M. & Ryerson, Megan S., 2018. "A long drive: Interregional airport passenger “leakage” in the U.S," Tourism Management, Elsevier, vol. 65(C), pages 237-244.
    11. Usami, Munekatsu & Manabe, Masashi & Kimura, Shin, 2017. "Airport choice and flight connectivity among domestic and international passengers – Empirical analysis using passenger movement survey data in Japan," Journal of Air Transport Management, Elsevier, vol. 58(C), pages 15-20.
    12. Johnson, Daniel & Hess, Stephane & Matthews, Bryan, 2014. "Understanding air travellers' trade-offs between connecting flights and surface access characteristics," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 70-77.
    13. Gelhausen, Marc C. & Berster, Peter & Wilken, Dieter, 2018. "A new direct demand model of long-term forecasting air passengers and air transport movements at German airports," Journal of Air Transport Management, Elsevier, vol. 71(C), pages 140-152.
    14. Fu, Qian & Kim, Amy M., 2016. "Supply-and-demand models for exploring relationships between smaller airports and neighboring hub airports in the U.S," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 67-79.
    15. Allroggen, Florian & Wittman, Michael D. & Malina, Robert, 2015. "How air transport connects the world – A new metric of air connectivity and its evolution between 1990 and 2012," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 80(C), pages 184-201.
    16. Li, Tao & Wan, Yan, 2019. "Estimating the geographic distribution of originating air travel demand using a bi-level optimization model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 131(C), pages 267-291.
    17. Loo, Becky P.Y., 2008. "Passengers’ airport choice within multi-airport regions (MARs): some insights from a stated preference survey at Hong Kong International Airport," Journal of Transport Geography, Elsevier, vol. 16(2), pages 117-125.
    18. Marcucci, Edoardo & Gatta, Valerio, 2011. "Regional airport choice: Consumer behaviour and policy implications," Journal of Transport Geography, Elsevier, vol. 19(1), pages 70-84.
    19. Guido Perboli & Marco Ghirardi & Luca Gobbato & Francesca Perfetti, 2015. "Flights and Their Economic Impact on the Airport Catchment Area: An Application to the Italian Tourist Market," Journal of Optimization Theory and Applications, Springer, vol. 164(3), pages 1109-1133, March.
    20. Ishii, Jun & Jun, Sunyoung & Van Dender, Kurt, 2009. "Air travel choices in multi-airport markets," Journal of Urban Economics, Elsevier, vol. 65(2), pages 216-227, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:81:y:2015:i:c:p:141-157. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.