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The big three EU Low Cost Carriers before and during the Covid-19 pandemic: Network overlaps and airfare effects

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  • Zhang, Hanxiang
  • Czerny, Achim I.
  • Grimme, Wolfgang
  • Niemeier, Hans-Martin

Abstract

This study uses a large dataset to consider the network change of the three largest European Low Cost Carriers (LCCs) easyJet, Ryanair and Wizz Air during the pre-Covid-19 period and the Covid-19 pandemic period. Network changes are characterized in terms of airport pairs, city pairs, numbers of flights and network overlaps. The results show that European LCCs increasingly expanded their networks into markets that had already been served by incumbent LCCs, which indicates that LCCs increasingly compete head-to-head among themselves. Difference-in-differences regressions estimate that network overlaps among these LCCs lead to airfare reductions of approximately six Euros, ten percent.

Suggested Citation

  • Zhang, Hanxiang & Czerny, Achim I. & Grimme, Wolfgang & Niemeier, Hans-Martin, 2023. "The big three EU Low Cost Carriers before and during the Covid-19 pandemic: Network overlaps and airfare effects," Research in Transportation Economics, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:retrec:v:97:y:2023:i:c:s0739885922000567
    DOI: 10.1016/j.retrec.2022.101235
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    Cited by:

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    2. Wang, Weicheng & Wu, Xiangru & Fu, Xiaowen & Wang, Kun, 2024. "Airline competition in Indonesian domestic market: Airline-within-airline strategies and impact of the COVID-19 pandemic," Transport Policy, Elsevier, vol. 156(C), pages 1-12.
    3. Sugishita, Kashin & Mizutani, Hiroki & Hanaoka, Shinya, 2024. "Disruption and recovery of the US domestic airline networks during the COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 114(C).
    4. Borsati, Mattia & Fageda, Xavier, 2024. "Airline price responses in the face of demand shocks: European lessons from the COVID-19 pandemic," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 186(C).

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    More about this item

    Keywords

    Covid-19; Europe; Low Cost Carriers; network overlaps; airfares;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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