The Peculiarities of Low-Cost Carrier Development in Europe

Jolanta Sabaitytė, Vida Davidavičienė and Gerard Frederick Van Kleef
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Jolanta Sabaitytė: Department of Business Technologies and Entrepreneurship, Business Management Faculty, Vilnius Gediminas Technical University, 10223 Vilnius, Lithuania
Vida Davidavičienė: Department of Business Technologies and Entrepreneurship, Business Management Faculty, Vilnius Gediminas Technical University, 10223 Vilnius, Lithuania
Gerard Frederick Van Kleef: Department of Traffic Analysis, Directorate of Railway Infrastructure, LG Infrastruktura LTD, 02100 Vilnius, Lithuania

Energies, 2020, vol. 13, issue 3, 1-19

Abstract: Low-cost carriers (LCCs) have been growing by 11.4% in revenue passenger kilometers over 2017 and changed the airline industry radically. It drove down prices in the industry. Southwest Airlines (USA) designed the LCC blueprint model, and Ryanair copied it within Europe, followed by other airlines. This research aims to fulfill the gap in contemporary research upon LCC successfulness in Europe by a description of the current situation within Europe (2018 and January 2019) and the development issues it faced, which are mapped by the Ishikawa fishbone diagram. Furthermore, to rank the airlines on strength and vulnerability, The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) methodology was used for meeting LCC characteristics and airline success. By comparison of meeting the LCC characteristics and the rank of the successfulness, the results of the TOPSIS analysis showed that the airlines meeting the most LCCs characteristics are seemingly less vulnerable to the development issues that airlines are facing, as Wizz Air and Ryanair are meeting most characteristics and are the most successful. Concluded is that airlines meeting the most LCC characteristics are the least vulnerable to current issues. However, major disruptions can still form an issue and limit growth. This research can be useful for comparing and positioning airlines in the market, based on issues and operational choices.

Keywords: low-cost carrier; development; airline industry; airline issues; transport industry; industry growth (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
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