Airline mergers with low cost carriers

Kawamori, Tomohiko; Lin, Ming Hsin

doi:10.1016/j.ecotra.2013.04.001

Cited by 10 publications

(8 citation statements)

References 20 publications

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“…Raghavan (2013) investigated synergies created by the Delta Air Lines and Northwest Airlines merger and found that although the 1978 deregulation brought more competition, it did not improve airline efficiency. Kawamori and Lin (2013) analyzed whether a merger between a legacy airline with hub-to-hub operations and a low-cost carrier with pointto-point operations would benefit the airline. Their study suggested that the profits would improve by removing one-stop services with large operating costs and nonstop services with small operating costs.…”

Section: Literature Reviewmentioning

confidence: 99%

Review of Recent Legacy Airline Mergers in the U.S.: An Empirical Study from Investors’ Perspectives

Huang

Hsu

Flouris

2019

JABE

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Since the 2008 financial crisis, three legacy airline mergers have dramatically reshaped the landscape of the U.S. airline industry. Due to the lengthy process involved in an airline merger, it is important to understand whether the investors view the merger favorably. This study examined how investors reacted to the three recent legacy airline mergers in the U.S. by adopting a GARCH-EVT-Copula approach. Our empirical results revealed that positive dependencies between returns and trading volume changes were observed for each merger during various periods, indicating that investors were optimistic about the mergers. Accordingly, implications for future mergers are discussed.

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Section: Literature Reviewmentioning

confidence: 99%

Review of Recent Legacy Airline Mergers in the U.S.: An Empirical Study from Investors’ Perspectives

Huang

Hsu

Flouris

2019

JABE

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“…The emergence of a LCCs business model is more significant determinant of the competitiveness of a particular route than the extent of route and hub concentration on that route (Karivate, 2004). In1978, the airline deregulation took place in the US (Reynolds, 2001;Knorr & Žigová, 2004;Rhoades & Waguespack, 2008;Hüschelrath & Müller, 2011;Diaconu,2012;Malaval et al, 2014;Peoples, 2014) which allowed plenty of LCCs to join the air transportation sector (Evangelho, 2005;Francis et al, 2006;Njegovan, 2006 ;Mason & Alamdari, 2007 ;Macário et al, 2007;Button & Ison, 2008;Malighetti et al, 2009;Sampaio, 2009;Hüschelrath & Müller, 2011;Kawamori & Lin, 2013;Kawasaki & Lin, 2013;Halpern & Graham, 2013;Kwoka et al, 2016). Involvement of LCCs in air transport market, not only provides benefits to the growth of the air transport industry, but also has an affirmative influence on travelers satisfaction (Evangelho et al,2005;Chowdhury,2007;Sun, 2012;Baker,2013;ICAO, 2013).…”

Section: The World Deregulation Of the Air Transport And The Emergencmentioning

confidence: 99%

“…In 1971, Southwest began its first low frills carriers (Calder, 2002;Vidović et al2006;Lauer, 2010;Diaconu & Popescu, 2011;Qin, 2012;diaconu & maxim, 2015). In October 1978, enormous LCCs start-up entered the air aviation sector, after the air transport deregulation in the USA (Kawamori & Lin, 2013). Southwest Airlines was credited by most air carriers with having been the first successful airline with a consistent concentration on keeping down operating costs to efficiently compete with the incumbent competitors (Mason, 2001;Malighetti et al, 2009;Christ, 2011;Airlineprofiler, 2015).…”

Section: The World Deregulation Of the Air Transport And The Emergencmentioning

confidence: 99%

The Influence of the 4Ps on Passengers' Purchasing Decision-Making: the Case of LCCs

Abdelhady¹,

Fayed²,

Fawzy³

2018

International Journal of Heritage, Tourism and Hospitality

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The liberalization of air transport industry in the USA by 1978 and then in the early 1990s in the Eu, that was resulted in having the LCCs, has led to significant changes in the global air transport sector .The success of LCCs, and their acquisition of a large market share in the air transport sector are due to the fact that such firms rely mostly on providing the air transport services with a competitive price for passengers. The study pursues to highlight on the experience of LCCs, and the extent of their success in the aviation market. A questionnaire was used to conduct this research. A sample of 292 air passengers participated in this study. The findings indicated that there is a significant relationship between the 4Ps of marketing, namely price, promotion and place, and passengers' purchasing decision-making. Additionally, the results also revealed that price is generally the most important element of the marketing mix affecting the passengers' purchasing decision-making when travelling on board of the LCCs.

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“…The research on the structural changes which the air transport industry has been undergoing since the beginning of deregulation and liberalisation can serve as a solid starting point. The work on the consolidation of the air transport industry and the emergence of international airline alliances (Alix et al 1999, Bilotkach and Hüschelrath 2012, Bruckener and Pels 2005, Debbage 1994, Dennis 2005, Denton and Dennis 2000, Evans 2001, Fan et al 2001, Gudmundsson and Lechner 2006, Iatrou and Alamdari 2005, Morrish and Hamilton 2002, Oum and Park 1997, Park et al 2001, Vowles 2000 and on the rise of low-cost carriers (LCCs) (Alderighi et al 2012, Dobruszkes 2006, Francis et al 2006, Graham and Shaw 2008, Hunter 2006, Kawamori and Lin 2013, Klophaus et al 2012, Morandi et al 2015, Morrell 2005) comes here to the fore. However, it must be recognised that, although all of these are important foci of analysis in geographical research on air transport (see Vowles 2006), the air transport sector is much more than airlines and alliances and that in the unevenly deregulated environment much more depends on other actors than before.…”

Section: Network Of Air Connections and Global Production Network Imentioning

confidence: 99%

Global production networks in the passenger aviation industry

Niewiadomski

2017

Geoforum

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Although the number of directions which geographical research on transport is taking has recently increased, the extent to which transport geography capitalises on theoretical advancements made in other sub-disciplines of human geography is still fairly limited. This especially pertains to economic geography which, in contrast to the predominantly positivist and quantitative transport geography, has developed over the last few decades a more post-positivist and qualitative profile. By means of focusing on passenger air transportone of the most neglected industries in economic geographythis paper aims to help bridge this gap. Three under-researched aspects of air transport are identified and a combination of two economic-geographical approachesglobal production networks (GPN) and evolutionary economic geography (EEG)is advocated as a useful conceptual basis for further, more qualitative and more critical research on this dynamic sector. The paper argues that GPN and EEG would help research on air transport to (1) employ network thinking beyond the infrastructural understanding of networks of air connections and thus better explain the multi-actor nature of the aviation sector, (2) complement the research on supra-national and national regulatory frameworks with more attention to the array of sub-national environments that shape the aviation industry 'from below', and (3) explore how the relations between aviation and economic development are moulded by different place-specific institutional factors. To lay foundations under further research the paper conceptualises the aviation industry as a global production network and uses the example of Polish passenger air transport to highlight the paper's key empirical implications.

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Airline mergers with low cost carriers

Cited by 10 publications

References 20 publications

Review of Recent Legacy Airline Mergers in the U.S.: An Empirical Study from Investors’ Perspectives

Review of Recent Legacy Airline Mergers in the U.S.: An Empirical Study from Investors’ Perspectives

The Influence of the 4Ps on Passengers' Purchasing Decision-Making: the Case of LCCs

Global production networks in the passenger aviation industry

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