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New-entrant airlines’ life-cycle analysis: growth, decline and collapse

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  • Gudmundsson, Sveinn Vidar

Abstract

Many new-entrant carriers enjoyed fast growth and by the same token sudden failure, therefore raising interest in the characteristics of their life cycles. The article proposes a different approach to life-cycle analysis of airlines by integrating an ‘evolution path’ based on size classification with a ‘traditional life-cycle path’ that assumes two distinctive routes to failure. On the basis of a survey conducted among managers of new-entrant airlines in Europe and the USA, various factors were identified that showed significant differences between stages of evolution. The findings do support that new-entrant airlines have similar life-cycle characteristics as firms in general.

Suggested Citation

  • Gudmundsson, Sveinn Vidar, 1998. "New-entrant airlines’ life-cycle analysis: growth, decline and collapse," Journal of Air Transport Management, Elsevier, vol. 4(4), pages 217-228.
    • Handle: RePEc:eee:jaitra:v:4:y:1998:i:4:p:217-228
    DOI: 10.1016/S0969-6997(98)00013-1
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    Cited by:

    1. Farooq, Muhammad Shoaib & Salam, Maimoona & Fayolle, Alain & Jaafar, Norizan & Ayupp, Kartinah, 2018. "Impact of service quality on customer satisfaction in Malaysia airlines: A PLS-SEM approach," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 169-180.
    2. Fan, Terence Ping Ching & Tan, Alex Tai Loong & Geng, Xuesong, 2014. "Rapid capacity expansions and failure: A trap for new airline entrants?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 61(C), pages 176-191.
    3. Samanci, Simge & Didem Atalay, Kumru & Bahar Isin, Feride, 2021. "Focusing on the big picture while observing the concerns of both managers and passengers in the post-covid era," Journal of Air Transport Management, Elsevier, vol. 90(C).
    4. Budd, Lucy & Francis, Graham & Humphreys, Ian & Ison, Stephen, 2014. "Grounded: Characterising the market exit of European low cost airlines," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 78-85.

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