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Revenue characteristics of long-haul low cost carriers (LCCs) and differences to full-service network carriers (FSNCs)

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  • Soyk, Christian
  • Ringbeck, Jürgen
  • Spinler, Stefan

Abstract

Low cost carriers (LCC) have smaller cost advantages on the long- than on the short-haul compared to network carriers (FSNCs). Hence, revenue competitiveness is critical. To evaluate long-haul LCC performance, this paper contributes a new metric for bench-marking the revenue per equivalent flight capacity. Second, a revenue model combining traffic, fare, load factor, and seat data is developed. Third, the revenue per flight capacity is evaluated across selected city-pairs. Long-haul LCCs earn revenue per flight capacity comparable to FSNCs. Lower direct yields compensated by fewer low-yield connecting passengers and significantly more passengers per aircraft have been identified as key factors.

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  • Soyk, Christian & Ringbeck, Jürgen & Spinler, Stefan, 2018. "Revenue characteristics of long-haul low cost carriers (LCCs) and differences to full-service network carriers (FSNCs)," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 112(C), pages 47-65.
    • Handle: RePEc:eee:transe:v:112:y:2018:i:c:p:47-65
    DOI: 10.1016/j.tre.2018.02.002
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    Cited by:

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    6. Bernardo, Valeria & Fageda, Xavier, 2020. "Impacts of competition on connecting travelers: Evidence from the transatlantic aviation market," Transport Policy, Elsevier, vol. 96(C), pages 141-151.
    7. Soliman, Amr & O’Connell, John Frankie & Tamaddoni-Nezhad, Alireza, 2022. "A data-driven approach for characterising revenues of South-Asian long-haul low-cost carriers per equivalent flight capacity per block hour," Journal of Air Transport Management, Elsevier, vol. 103(C).
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