Eureka! Institutional Repository

The news of low cost airline’s success in Europe inundates our media continuously: an increased number of passengers, a higher turnover and an increased profit rate are noticed compared to the previous years. Research institutions as well as scientific magazines show their interest in this topic by providing a large number of studies and articles about the operating features and future perspectives of low cost carriers. Low cost air travel has not been existing for some years only. With the Us Airline Deregulation Act in 1978, the skies in the United States have been deregulated now for more than 20 years. The so-called Liberalization of the European transport market took place in 1993 with the introduction of the "Third Package" that made free pricing and full cabotage possible. In Continental-Europe, low cost air travel has become very popular recently with a huge number of start-ups in 2002. Theories about future growth of low cost airlines predict that in the medium term they will be able to enlarge their results, but in the long term they will not be able to take away crucial shares of the market from the incumbents. With the term Low Cost Airlines it is meant the Airlines which prform regular flights and offer cheap prices. What distinguishes them from the flag carriers are the lower overheads, whilst they differentiate themselves from charters in terms of their regular and scheduled flights. The low-cost airlines have been steadily increasing its popularity in the traveling public, mainly because of the 7 attractive prices. While they are spreading steadily and are prevailing in most markets, they are tipping the balance between traditional airlines. Consequently, the in-depth study of the characteristics and functioning of the airlines of this type is of special interest. In this dissertation, we will study: i. The history of the emergence of low-cost airlines. ii. The particular features of low-cost carriers iii. The historical evolution and development of low cost carriers around the world. iv. The case study of Ryanair and Eastjet