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Low‐Cost Airlines: A Failed Business Model?

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  • Kenneth Button

Abstract

The article examines the sustainability of the low‐cost, or no‐frills, airline business model. It looks at the background to the development of this managerial approach within the context of some prevailing business theories and considers variations on the basic low‐cost airline model. It assesses, drawing from the experiences of a number of markets, whether the model in itself is likely to be enduring, or whether it is simply a transient way for some airlines to recover their full costs.

Suggested Citation

  • Kenneth Button, 2012. "Low‐Cost Airlines: A Failed Business Model?," Transportation Journal, John Wiley & Sons, vol. 51(2), pages 197-219, April.
    • Handle: RePEc:wly:transj:v:51:y:2012:i:2:p:197-219
    DOI: 10.5325/transportationj.51.2.0197
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    References listed on IDEAS

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    5. Button, Kenneth, 2003. "Does the theory of the ‘core’ explain why airlines fail to cover their long-run costs of capital?," Journal of Air Transport Management, Elsevier, vol. 9(1), pages 5-14.
    6. Morrell, Peter, 2005. "Airlines within airlines: An analysis of US network airline responses to Low Cost Carriers," Journal of Air Transport Management, Elsevier, vol. 11(5), pages 303-312.
    7. D. E. Pitfield, 2005. "Some Speculations and Empirical Evidence on the Oligopolistic Behaviour of Competing Low-Cost Airlines," Journal of Transport Economics and Policy, University of Bath, vol. 39(3), pages 379-390, September.
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    11. Kenneth Button, 2005. "The Economics of Cost Recovery in Transport," Journal of Transport Economics and Policy, University of Bath, vol. 39(3), pages 241-258, September.
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