IDEAS home Printed from https://ideas.repec.org/a/ers/journl/vxxivy2021ispecial1-part2p301-310.html
   My bibliography  Save this article

Economization Methods Used by Low-Cost Airlines – An Overview

Author

Listed:
  • Dominik Punda
  • Malgorzata Jasiulewicz-Kaczmarek
  • Jacek Dziwulski

Abstract

Purpose: The crisis caused by the pandemic has forced airlines (both full-service carriers (FCC) and low cost carriers (LCC)) to review their business models and look for opportunities to make up for losses. The goal of this paper is to review the cost optimization methods used by LCC airlines and to identify the activities of LCC that were taken to reduce costs. Design/Methodology/Approach: The analysis of the areas of economization of activities undertaken by the LCC carried out in the article is the result of a literature review of business models used by LCC carriers. Findings: The conducted literature analysis allowed for the identification of seven main areas in which measures are taken to reduce the costs of the LCC line. Practical Implications: Economization methods implemented by LCC lines at the strategic level reduce the carrier's costs and can be adapted to the market in which it operates. Originality/Value: Although the business models used by LCC lines are not a new topic, the review of economization methods from a strategic perspective presented in the article has not been discussed in the literature.

Suggested Citation

  • Dominik Punda & Malgorzata Jasiulewicz-Kaczmarek & Jacek Dziwulski, 2021. "Economization Methods Used by Low-Cost Airlines – An Overview," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 301-310.
    • Handle: RePEc:ers:journl:v:xxiv:y:2021:i:special1-part2:p:301-310
    as

    Download full text from publisher

    File URL: https://ersj.eu/journal/2226/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Corbo, Leonardo, 2017. "In search of business model configurations that work: Lessons from the hybridization of Air Berlin and JetBlue," Journal of Air Transport Management, Elsevier, vol. 64(PB), pages 139-150.
    2. Tsai, Wen-Hsien & Kuo, Lopin, 2004. "Operating costs and capacity in the airline industry," Journal of Air Transport Management, Elsevier, vol. 10(4), pages 269-275.
    3. Forsyth, Peter, 2003. "Low-cost carriers in Australia: experiences and impacts," Journal of Air Transport Management, Elsevier, vol. 9(5), pages 277-284.
    4. Fageda, Xavier & Suau-Sanchez, Pere & Mason, Keith J., 2015. "The evolving low-cost business model: Network implications of fare bundling and connecting flights in Europe," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 289-296.
    5. Loh, Hui Shan & Yuen, Kum Fai & Wang, Xueqin & Surucu-Balci, Ebru & Balci, Gökcay & Zhou, Qingji, 2020. "Airport selection criteria of low-cost carriers: A fuzzy analytical hierarchy process," Journal of Air Transport Management, Elsevier, vol. 83(C).
    6. Daft, Jost & Albers, Sascha, 2015. "An empirical analysis of airline business model convergence," Journal of Air Transport Management, Elsevier, vol. 46(C), pages 3-11.
    7. Sanchez, David Torres & Boyacı, Burak & Zografos, Konstantinos G., 2020. "An optimisation framework for airline fleet maintenance scheduling with tail assignment considerations," Transportation Research Part B: Methodological, Elsevier, vol. 133(C), pages 142-164.
    8. Pereira, Bruno Alencar & Caetano, Mauro, 2015. "A conceptual business model framework applied to air transport," Journal of Air Transport Management, Elsevier, vol. 44, pages 70-76.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ers:journl:v:xxiv:y:2021:i:special2:p:301-310 is not listed on IDEAS
    2. Adiloğlu-Yalçınkaya, Leyla & Besler, Senem, 2021. "Institutional factors influencing business models: The case of Turkish Airlines," Journal of Air Transport Management, Elsevier, vol. 91(C).
    3. Magdalina, Ana & Bouzaima, Martin, 2021. "An empirical investigation of European airline business models: Classification and hybridisation," Journal of Air Transport Management, Elsevier, vol. 93(C).
    4. Chiambaretto, Paul & Combe, Emmanuel, 2023. "Business model hybridization but heterogeneous economic performance: Insights from low-cost and legacy carriers in Europe," Transport Policy, Elsevier, vol. 136(C), pages 83-97.
    5. Soyk, Christian & Ringbeck, Jürgen & Spinler, Stefan, 2017. "Long-haul low cost airlines: Characteristics of the business model and sustainability of its cost advantages," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 215-234.
    6. Klophaus, Richard & Yu, Chunyan, 2023. "Short-haul airline services in Europe and North America - A cross-business model and cross-continental analysis," Journal of Air Transport Management, Elsevier, vol. 109(C).
    7. Alderighi, Marco & Nicolini, Marcella & Piga, Claudio A., 2019. "Is low-cost carriers’ revenue management a firm capability?," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 15-22.
    8. Klophaus, Richard & Merkert, Rico & Lordan, Oriol, 2021. "Mesh network as a competitive advantage for European LCCs: An alternative topology to hub-and-spoke for selling online connections," Transport Policy, Elsevier, vol. 106(C), pages 196-204.
    9. O'Connell, John F. & Avellana, Raquel Martinez & Warnock-Smith, David & Efthymiou, Marina, 2020. "Evaluating drivers of profitability for airlines in Latin America: A case study of Copa Airlines," Journal of Air Transport Management, Elsevier, vol. 84(C).
    10. Ferrer-Rosell, Berta & Coenders, GermÃ, 2017. "Airline type and tourist expenditure: Are full service and low cost carriers converging or diverging?," Journal of Air Transport Management, Elsevier, vol. 63(C), pages 119-125.
    11. Lange, Anne & Sieling, Julian & Gonzalez Parra, Garoe, 2019. "Convergence in airline operations: The case of ground times," Journal of Air Transport Management, Elsevier, vol. 77(C), pages 39-45.
    12. Azadian, Farshid & Vasigh, Bijan, 2019. "The blurring lines between full-service network carriers and low-cost carriers: A financial perspective on business model convergence," Transport Policy, Elsevier, vol. 75(C), pages 19-26.
    13. Urban, Marcia & Klemm, Martin & Ploetner, Kay Olaf & Hornung, Mirko, 2018. "Airline categorisation by applying the business model canvas and clustering algorithms," Journal of Air Transport Management, Elsevier, vol. 71(C), pages 175-192.
    14. Renan P. de Oliveira & Alessandro V. M. Oliveira & Gui Lohmann, 2021. "A Network-Design Analysis of Airline Business Model Adaptation in the Face of Competition and Consolidation," Transportation Science, INFORMS, vol. 55(2), pages 532-548, March.
    15. Albers, Sascha & Daft, Jost & Stabenow, Sebastian & Rundshagen, Volker, 2020. "The long-haul low-cost airline business model: A disruptive innovation perspective," Journal of Air Transport Management, Elsevier, vol. 89(C).
    16. Birolini, Sebastian & Besana, Emanuele & Cattaneo, Mattia & Redondi, Renato & Sallan, Jose Maria, 2022. "An integrated connection planning and passenger allocation model for low-cost carriers," Journal of Air Transport Management, Elsevier, vol. 99(C).
    17. Ivana KIRSCHNEROVÃ, 2017. "Product Analysis Of Business Aviation Companies: A Two-Dimensional Approach," Transport Problems, Silesian University of Technology, Faculty of Transport, vol. 12(1), pages 15-23, March.
    18. Loh, Hui Shan & Yuen, Kum Fai & Wang, Xueqin & Surucu-Balci, Ebru & Balci, Gökcay & Zhou, Qingji, 2020. "Airport selection criteria of low-cost carriers: A fuzzy analytical hierarchy process," Journal of Air Transport Management, Elsevier, vol. 83(C).
    19. Corbo, Leonardo, 2017. "In search of business model configurations that work: Lessons from the hybridization of Air Berlin and JetBlue," Journal of Air Transport Management, Elsevier, vol. 64(PB), pages 139-150.
    20. Lu, Jin-Long & Yang, Chih-Wen, 2022. "Good or bad? Passenger feelings regarding code-share alliances among airlines," Journal of Air Transport Management, Elsevier, vol. 103(C).
    21. Alderighi, Marco & Nicolini, Marcella & Piga, Claudio A., 2016. "Targeting leisure and business passengers with unsegmented pricing," Tourism Management, Elsevier, vol. 54(C), pages 502-512.

    More about this item

    Keywords

    Low-cost airline; economization; operating costs; airline business model.;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xxiv:y:2021:i:special1-part2:p:301-310. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ersj.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.