Low-cost carriers versus full service carriers in ASEAN: The impact of liberalization policy on competition

Shinya Hanaoka, Mikio Takebayashi, Tomoki Ishikura and Batari Saraswati

Journal of Air Transport Management, 2014, vol. 40, issue C, 96-105

Abstract: This study analyses the ASEAN Single Aviation Market (ASAM) policy to be introduced by the end of 2015. We conduct a scenario study to estimate the impact of low-cost carrier (LCC) network expansion under liberalized air transport policies in the ASEAN region. Establishing joint ventures is a possible way for foreign carriers to expand the network in this region, even after starting ASAM. This is unique as joint ventures are not only subsidiaries of the full-service carriers, as is the case in the United States and Europe. We also apply a quantitative air transport market model to estimate the policy impact of the entry of new LCCs on routes from three ASEAN hub airports to Manila airport, which covers the impact on the whole network. The model produces several significant results, including that the entry of one LCC on one route may affect the fare, frequency, and profitability of related competitive routes for the entire network.

Keywords: Liberalization policy; Low-cost carriers; ASEAN; Bi-level model (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:40:y:2014:i:c:p:96-105

DOI: 10.1016/j.jairtraman.2014.06.008

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