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Serving vs. settling: What drives the establishment of low-cost carriers’ foreign bases?

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  • Klein, Klemens
  • Albers, Sascha
  • Allroggen, Florian
  • Malina, Robert

Abstract

This paper uses a probit model on a cross-sectional dataset of 202 airports and 29 airlines to assess the drivers for the establishment of foreign bases by European low-cost carriers (LCCs). We find that managerial, organizational, and environmental factors impact on foreign base establishment. In particular, there is evidence that the presence of a growth-oriented firm leader and the strategic importance of an airport for an airline significantly increase the probability of the presence of bases, while national unit labor costs, the volatility of flight operations and the membership of an LCC in an airline group significantly decrease this probability.

Suggested Citation

  • Klein, Klemens & Albers, Sascha & Allroggen, Florian & Malina, Robert, 2015. "Serving vs. settling: What drives the establishment of low-cost carriers’ foreign bases?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 79(C), pages 17-30.
    • Handle: RePEc:eee:transa:v:79:y:2015:i:c:p:17-30
    DOI: 10.1016/j.tra.2015.03.021
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    4. Klophaus, Richard & Merkert, Rico & Lordan, Oriol, 2021. "Mesh network as a competitive advantage for European LCCs: An alternative topology to hub-and-spoke for selling online connections," Transport Policy, Elsevier, vol. 106(C), pages 196-204.

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