ImpactandModelofLow-CostCarriers.pptVIP

Impact and Model of Low-Cost Carriers What is low-cost carrier? Why can they attain lower cost? What impact does low-cost carrier have on route fares and traffic? Southwest Airlines Southwest is unique in that: 1. Focus on dense, short-haul markets 2. Point-to-point service using high frequency 3. Single class, no prior seat assignment 4. Simple Frequent Flyer Program 5. Single type of aircraft (Boeing 737) 6. Avoids congested airports 7. Attain low cost, low fare Impact of Low-cost Carriers Price effect Demand effect “Spill over” effects Consumer surplus A Study in 1996 Case study: SW ent