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Do low cost carriers have different corporate governance models?

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  • Alves, Carlos F.
  • Barbot, Cristina

Abstract

In this paper, we investigate whether different business models in the same industry (passenger air transportation) lead to different corporate governance models. We found that low-cost carriers organise their boards differently from full service carriers to achieve lower costs and a faster decision-making process that is required by their business model. We also found that low-cost carriers and full service carriers solve their potential agency cost problems differently and that full service carriers have more board monitoring committees, and low-cost carriers have a closer coincidence of interests between shareholders and executive directors.

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  • Alves, Carlos F. & Barbot, Cristina, 2007. "Do low cost carriers have different corporate governance models?," Journal of Air Transport Management, Elsevier, vol. 13(2), pages 116-120.
    • Handle: RePEc:eee:jaitra:v:13:y:2007:i:2:p:116-120
    DOI: 10.1016/j.jairtraman.2006.11.001
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    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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