The impact of regulation on the low-cost carrier air transport sector

Abstract

Deregulation in Europe started in 1987, paving the way for the low-cost model pioneered by Southwest Airlines in the US in a now liberalised European market, where any EU registered airline can fly on any route with any schedule, capacity or fare — subject only to slot availability. The low-cost model differentiated itself by offering low fares through radically reduced costs in every conceivable facet of the business and capitalised on new forms of distribution. Changes in regulation have allowed airports to tap into the low-cost market as well, offering lower airport charges for terminals designed to a reduced specification.