Ultra Low-Cost Carriers and Airport Choice

Keywords: aviation, air transport, airline, LCC
Session Type: Virtual Paper Abstract
Day: Saturday
Session Start / End Time: 2/26/2022 02:00 PM (Eastern Time (US & Canada)) - 2/26/2022 03:20 PM (Eastern Time (US & Canada))
Room: Virtual 24

Abstract

Recently the domestic aviation industry has been influenced by rapidly growing ultra low-cost carriers (ULCCs). Existing literature, however, is limited for North American ULCCs, often lumping them together with mainstream low-cost carriers. The pattern of markets served by ULCCs is different than that of other airlines, requiring further research to examine causal factors. This paper seeks to understand market factors underlying ULCC service decisions. The relationship between ULCC operations and airport choice factors was analyzed using three methods: descriptive analysis of 2019 flight data to establish existing conditions, two regression analyses to evaluate airport market variables, and three case studies examining distinct scenarios through interviews with airport managers. Enplanement data and independent variables were assembled for every domestic Part 139 airport offering scheduled service in 2019 in the U.S. The first regression analysis estimated a OLS regression model to analyze the volume of enplanements. The second model estimated a binary logistic equation for the existence or absence of ULCC service. Case studies for Bellingham, Waco, and Lincoln were selected using compelling airport factors and relevant ULCC experience. Maps of enplanements and market share revealed concentrations of ULCC operations on the East Coast. Each regression analysis showed a strong relationship between population and ULCC operations. Tourism was significantly related only to enplanements. Distance and competition variables were significantly associated with ULCC presence. Case studies revealed the importance of airport fees in ULCC preferences. Further research may shed light on this complex and ever-changing subset of the domestic commercial aviation industry.