Article ID Journal Published Year Pages File Type
1023094 Transportation Research Part E: Logistics and Transportation Review 2015 17 Pages PDF
Abstract

•We estimate impact of low-cost carriers (LCCs) on airport choice.•LCCs generate demand, even after accounting for lower fares.•LCCs at an airport generate demand for non-LCC competitors.•Demand generation is highest for leisure passengers.•LCC presence reduces demand at competing airports.

Previous research has shown that low-cost carriers (LCCs) may stimulate traffic at an airport by offering low fares. Using passenger survey data from the Washington–Baltimore region’s three airports, we find that the benefits of LCCs to airports extend beyond the traffic generated directly by the LCCs through their low fares. In addition, we find that the mere presence of an LCC at an airport can attract passengers, even to competing carriers. These “halo effects” from LCC presence increase the significance to airport managers of attracting LCCs in order to generate passenger demand.

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