The impact of low-cost carriers on high-quality producers in the aviation industry: cost-benefit analysis

Abstract

Purpose – This paper aims to examine the low-cost carriers (LCC) impact on the high-quality carriers (HQC) in the aviation industry. The impact of LCCs on high-quality producers in the aviation industry has been a significant and multifaceted phenomenon. Design/methodology/approach – The study employs a captivating case study approach, investigating into the intricate fabric of the subject matter. Interviews serve as the cornerstone of primary evidence, offering first-hand insights, while secondary data sourced from documents adds depth to the exploration of the challenges encountered by the HQC. Findings – The study concludes that LCCs have disrupted the traditional aviation landscape by offering low fares, simplified service models and aggressive cost-cutting strategies. This disruption has affected both the high-quality producers, such as full-service airlines. Full-service airlines have adopted a strategy of segmenting their market by offering multiple fare classes, with varying levels of service and flexibility. This allows them to target both price-sensitive travelers and those seeking premium services, catering to a broader customer base. The competition from LCCs has spurred innovation within the aviation industry, leading to advancements in technology, digital services and operational efficiency. Airlines, both LCCs and traditional carriers, have had to adapt to evolving consumer preferences and embrace digital solutions for booking, check-in and in-flight services. Research limitations/implications – While this study provides a valuable cost-benefit analysis of the impact of LCC on high-quality producers in the aviation industry, it is essential to acknowledge its limitations and recognize the avenues for future research to further enhance our understanding of this complex and evolving industry landscape. While this study contributes valuable insights into the impact of LCCs on high-quality producers in the aviation industry, it is essential to recognize its limitations and identify opportunities for future research to expand our understanding of this complex and dynamic landscape. By addressing these limitations and exploring new avenues of inquiry, we can continue to advance our knowledge and inform evidence-based decision-making within the industry. Originality/value – This study pioneers an exploration into the intricate tapestry of factors molding the future of the aviation sector. Through its groundbreaking analysis, it furnishes indispensable insights for industry stakeholders, policymakers and the discerning traveling public, setting a new benchmark for understanding and navigating the aviation landscape.

Keywords

• Low-cost carriers
• High-quality carriers
• Cost accounting
• Middle East market