Abstract for: Analysis of low-cost carrier operations in long-haul air transport markets
The low-cost carrier (LCC) services business model shaped the landscape of commercial aviation markets. After decades of previous trial-and-error attempts to successfully transfer the low-cost business model to long-haul markets, a few airlines operate low-cost services on selected routes in the transatlantic market today. This paper presents a System Dynamics (SD) approach to model the market entry of a LCC in a long-haul market (LHLCC) in order to analyse the diffusion of the low-cost business model in long-haul markets and the subsequent redistribution of market shares. The model differentiates between the full-service network carrier (FSNC) and the LHLCC business model and presents the market entry of long-haul low-cost services in the transatlantic market between 2014 and 2035, focusing on the development of the two different airline types.