Analysis of Low-Cost Carriers and Airport Choice

Project: Research project

Project Details

Description

Analysis of Low-Cost Carriers and Airport Choice Analysis of Low-Cost Carriers and Airport Choice Analysis of Low-Cost Carriers and Airport Choice The dawn of the budget airline in the United States can be traced back to the deregulation of domestic commercial aviation in the 1970s. For the first time, airlines were free to compete on a national scale using distinct business models. Naturally, this shift tended to reshape commercial airline business models, resulting in decreasing fares, the maximization of passenger capacity, and the integration of smaller aviation markets. The changing landscape of carriers has also impacted airports throughout the last 50 years. Carriers such as Southwest Airlines, America West, and American Trans Air, expanded to secondary airports throughout the U.S. with high frequencies of flights and low fares, attracting substantial passenger totals. The success of these airlines encouraged airports to cater to them with investment in facilities and services for carriers as well as passengers. Since the mid-2000s, the industry has been rapidly influenced by a new generation of evolved ultra low-cost carriers such as Spirit, Allegiant, and Frontier Airlines. These carriers have taken the low-cost model a step further by operating point-to-point routes with the bare minimum of passenger amenities, offering infrequent flight schedules at off-peak hours, and negotiating airport fees to keep costs low. This research project will evaluate the factors behind the airport choice preferences of low-cost carriers (LCCs) in the United States. It is well-known that LCCs prefer to operate out of secondary airports within the same region as larger hub airports. However, especially within North America, LCCs sometimes deviate from the trend by operating to hub airports of other major carriers, and to isolated airport markets that did not previously have any commercial service. This leads to several relevant questions: Do LCCs select airport markets strictly due to a lack of commercial competition? Does an increased level of airline competition at major hubs make LCC fares more attractive to flyers and therefore airports? Are airport operational figures such as terminal facilities, available time slots, and airport capacity more important to LCCs than competition? Responses to these questions can aid in an understanding of LCC business priorities, and more importantly can be used to guide future development at airports to appeal to such airlines. The proposed research will take a qualitative approach. Using case studies of airports in the United States based on size, proximity, and operational figures, the research will attempt to evaluate the relationship between airport factors and the prevalence of low-cost carriers. Previous research has established several factors that inform airport choice for LCCs, such as quick aircraft turnaround times, lack of ground congestion (Warnock-Smith and Potter, 2005), and low aeronautical fees charged by airports (Francis, Fidato, and Humphreys, 2003). However, studies have not attempted to rank these factors in terms of importance, and only one research study presented an index of an airports attractiveness based on LCC priorities (Mason and Morrison 2008). Each of these studies focused primarily on European LCCs and airports. There is reason to believe American carriers and airports operate with different models given the diversity of carriers, commercial markets, and the slow pace of airport privatization evident in this country. Interviews with airport management staff will aid in the understanding of the LCC priorities in commercial service, and grant insight into specific changes made to airports in order to satisfy LCCs. With this information, the research is able to form conclusions regarding the preferences and components which benefit the airport-LCC relationship and rank them in terms of importance. The study could also produce an index of U.S. airports which contain the appropriate characteristics to attract LCC commercial service growth in the future.
StatusFinished
Effective start/end date9/1/208/31/21

Funding

  • Transportation Research Board (TRB): $12,000.00

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