Low Cost Carrier Characteristics
The idea to enter the world of the full cost carriers by low prices isn’t a new one. Already in 1977 Laker Airways founded the “Sky Train” between London and New York. Even if this service was never successful, more and more low cost carriers were founded during the progress of deregulation and the development of an own low cost strategy began.
When we today have a look at the homepages of low cost carriers we cannot but state that nearly all of them are operating successful despite the issues of September 11th in 2001, SARS in 2002 and the war in Iraq in 2003.
Southwest for example has shown a positive net income for the period of 1990 to 2002 (Appendix A) and is nr. 5 of America’s most admired companies in 2005 (Homepage). Also Ryan Air was able to enhance its number of passengers transported from 5000 in 1985 to 24,635,000 in 2004 (Appendix B).
The success of the low cost carriers had major competitive effects on the mainstream full cost airlines of whom many......
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