Long-haul low cost airlines: Characteristics of the business model and sustainability of its cost advantages

Christian Soyk, Jürgen Ringbeck and Stefan Spinler

Transportation Research Part A: Policy and Practice, 2017, vol. 106, issue C, 215-234

Abstract: Existing academic literature is inconclusive about characteristics and viability of the long-haul low cost airline business model, whereas several airlines of this type are emerging. This article aims to validate its defining characteristics by clustering a sample of 37 transatlantic airlines using principal component and hierarchical cluster analyses along a newly constructed long-haul airline business model framework. To contribute to the evaluation of business model viability, cost differences between clusters are uncovered subsequently followed by a discussion of their sustainability. Key findings include the characterization of the emerging long-haul LCC business model and its significant differences from existing legacy hub and leisure carrier models. On a cluster average, 33% lower unit costs compared to legacy hub carriers were identified, of which 24 percentage points were evaluated as sustainable.

Keywords: Airlines; Business models; Long-haul; Low cost; Point-to-point (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (15)

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DOI: 10.1016/j.tra.2017.09.023

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