The entry of low-cost carriers into commercial aviation

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The entry of low-cost carriers into commercial aviation had a legacy of factors - both environmental and operational - that contributed to their business models. If the Airline Deregulation Act of 1978 helped them scale their operations, their 'no-frills' approach eased their entry strategies. The success of their business model can be inferred from the fact that they survived one of the worst downturns (the September 11 terrorist attacks) in the history of commercial aviation, while the major airlines were desperately seeking for bankruptcy protection.

1. How can low-cost carriers exert an enormous pricing pressure on the major airlines with their low fare, point-to-point services? How can advertising help a carrier? What pricing mechanisms can carriers use to maximize profits?

Reference no: EM13999197

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