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Different models in different spaces or liberalized optimizations? Competitive strategies among low-cost carriers

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  • Graham, Mark

Abstract

This paper asks whether the economic success of low cost carriers (LCCs) has been achieved through optimizations of network structures to liberalized market conditions. By examining the network structures of six successful LCCs, the paper moves away from the idea of a “low cost carrier model” and instead highlights the range of spatial strategies employed by budget airlines in liberalized marketplaces. Findings show that significantly different spatial models are employed by the six carriers examined in this study. Unlike previous studies on the networks structures of LCCs, this paper moves beyond any one specific region and looks at the networks of budget airlines in Asia, Europe, and North America. Fundamental differences in the network structures of LCCs on these three continents indicate that liberalization has allowed for the utilization of a variety of spatial operating models rather than a singular optimal model.

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  • Graham, Mark, 2009. "Different models in different spaces or liberalized optimizations? Competitive strategies among low-cost carriers," Journal of Transport Geography, Elsevier, vol. 17(4), pages 306-316.
  • Handle: RePEc:eee:jotrge:v:17:y:2009:i:4:p:306-316
    DOI: 10.1016/j.jtrangeo.2009.02.004
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    Cited by:

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    2. Fageda, Xavier & Suau-Sanchez, Pere & Mason, Keith J., 2015. "The evolving low-cost business model: Network implications of fare bundling and connecting flights in Europe," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 289-296.
    3. Tavalaei, M. Mahdi & Santalo, Juan, 2019. "Pure versus hybrid competitive strategies in the airport industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 124(C), pages 444-455.
    4. Samuel D. Barrows, 2019. "Assessing the Stock Market Performances of EU Low-Cost Airlines," International Journal of Economics and Financial Issues, Econjournals, vol. 9(4), pages 95-100.
    5. Wu, Chuntao & Liao, Maozhu & Zhang, Yahua & Luo, Mingzhi & Zhang, Guoquan, 2020. "Network development of low-cost carriers in China's domestic market," Journal of Transport Geography, Elsevier, vol. 84(C).
    6. Dobruszkes, Frédéric & Givoni, Moshe & Vowles, Timothy, 2017. "Hello major airports, goodbye regional airports? Recent changes in European and US low-cost airline airport choice," Journal of Air Transport Management, Elsevier, vol. 59(C), pages 50-62.
    7. Dobruszkes, Frédéric, 2013. "The geography of European low-cost airline networks: a contemporary analysis," Journal of Transport Geography, Elsevier, vol. 28(C), pages 75-88.
    8. John Francis O’Connell & David Connolly, 2017. "The strategic evolution of Aer Lingus from a full-service airline to a low-cost carrier and finally positioning itself into a value hybrid airline," Tourism Economics, , vol. 23(6), pages 1296-1320, September.
    9. Castillo-Manzano, José I. & López-Valpuesta, Lourdes & Pedregal, Diego J., 2012. "What role will hubs play in the LCC point-to-point connections era? The Spanish experience," Journal of Transport Geography, Elsevier, vol. 24(C), pages 262-270.

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