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ASSESSING TWO AIRLINE MODELS: LEGACY VS. LOW COST CARRIERS

Pablo Coto–Millán, Xose Luís Fernández, Pedro Casares–Hontañón, Vicente Inglada and Miguel Ángel Pesquera
Additional contact information
Pablo Coto–Millán: University of Cantabria
Xose Luís Fernández: University of Cantabria
Pedro Casares–Hontañón: University of Cantabria
Vicente Inglada: Universidad Nacional de Educación a Distancia, Madrid
Miguel Ángel Pesquera: University of Cantabria

Articles, 2015, vol. 42, issue 4

Abstract: This work studies the technical efficiency of fifty European airline companies over the period 2003-2012. In the period under study, European airlines have suffered a decline in profits due to the 2007 crisis and rising oil prices in Europe. These phenomena have increased competition in the airline industry. Using stochastic frontier methods, this paper contributes to the literature by comparing the efficiency of two Models of Knowledge Management: legacy carriers and low-cost carriers. Furthermore, this paper contributes to the literature by analysing the effects other topics of airline literature including deregulation/liberalisation, the importance of the European hubs, and the impact on efficiency of the time and timeliness management. The results show that Low Cost model were, on average, 13 per cent more efficient in the period under study, which has led low cost carriers to increase their market share through more competitive prices.

Date: 2015
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