This paper reports the findings of an empirical study on the low-cost airline market. A lot of literatures on low-cost carriers' business model agree that low-cost airlines operate with high load factors. However, due to variations in the market development life cycle of low-cost carriers from one region to another, empirical evidences have shown mixed results of the effect of increasing airline capacity on load factor. The paper therefore extends this analysis by examining two airlines in Kenya over 72 months period; and explores such impact using panel data to capture both time-series and cross-sectional elements over the period. Findings indicate that fleet capacity is a significant positive predictor of load factor. The paper finally underlines that increasing capacity by 1 seat will result in an increase of 0.03% in load factor.

Studies show that low-cost carriers have gained 15.2% market shares while enplanement had increased by 38% following their emergence. Whereas frequency is directly influenced by airlines' key factor such as turn-time, it, on the other hand, influences directly other airline market parameters. This proposes a mediation possibility. However, the mediating role of frequency on the relationship between turn-time on carriers' market share, and the effect of low-cost carrier in Kenya was still unknown. The purpose of this study, therefore, was to investigate the mediating role of route characteristics on the effect of low-cost carriers on the airline market in Kenya. The specific objective of the study was to determine the effect of the mediating frequency on the relationship between turn-time and carriers' market share. Using panel data of 2 airlines to capture both time-series and cross-sectional elements over the 72 months period, this paper will illustrate that frequency partially and off-the-scale significantly mediates turn-time-carrier's market share relation. Path regression analysis is used to track the influence of the mediating route characteristics.