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Air services on thin routes: Regional versus low-cost airlines

  • Fageda, Xavier
  • Flores-Fillol, Ricardo
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    An examination of the impact in the US and EU markets of two major innovations in the provision of air services on thin routes - regional jet technology and the low-cost business model - reveals significant differences. In the US, regional airlines monopolize a high proportion of thin routes, whereas low-cost carriers are dominant on these routes in Europe. Our results have different implications for business and leisure travelers, given that regional services provide a higher frequency of flights (at the expense of higher fares), while low-cost services offer lower fares (at the expense of lower flight frequencies). Keywords: air transportation; regional jet technology; low-cost business model; thin markets. JEL Classification Numbers: L13; L2; L93.

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    File URL: http://hdl.handle.net/2072/179624
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    Paper provided by Universitat Rovira i Virgili, Department of Economics in its series Working Papers with number 2072/179624.

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    Date of creation: 2011
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    Handle: RePEc:urv:wpaper:2072/179624
    Contact details of provider: Postal: Avda. de la Universitat,1 - 43204 Reus (Tarragona)
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    1. Jan Brueckner & Ricardo Flores-Fillol, 2007. "Airline Schedule Competition," Review of Industrial Organization, Springer, vol. 30(3), pages 161-177, May.
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    21. Fageda, Xavier & Fernández-Villadangos, Laura, 2009. "Triggering competition in the Spanish airline market: The role of airport capacity and low-cost carriers," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 36-40.
    22. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "On the optimal distribution of traffic of network airlines," European Economic Review, Elsevier, vol. 56(6), pages 1164-1179.
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