individual

Authors' Class Standing

Ben-Joel Ndjami

Lead Presenter's Name

Ben-Joel Ndjami

Faculty Mentor Name

n/a

Abstract

In just a few decades, ultra-low costs airlines have dramatically change the market of aircraft transportation. Since deregulation emerged, increase competition, pressure on low cost airfares, fuel price volatility and global economic recession have forced major airlines out of business leading to the rise of low cost carriers. In past few decades, the most successful and profitable airline have historically had the lowest cost structure. Recently, ultra-low cost airlines have seen unanticipated years of growth and expansion. Since 2003, allegiant airline has seen its schedule revenue grow 32 times, and its profit grow 66 times (compared to 3x for southwest, 3x for EasyJet, 5x for Ryanair since 2003). This study aims to study the financial reasons behind the cost structure of ultra-low cost airlines compared to their low cost peers. Plus, it will also examines the economic feasibility of an ultra-low cost airline smaller than the industry minimum by designing a financial model to determine way to yield higher profits

Did this research project receive funding support (Spark or Ignite Grants) from the Office of Undergraduate Research?

No

Share

COinS
 

The Economic Feasibility of an Ultra-low Cost Airline

In just a few decades, ultra-low costs airlines have dramatically change the market of aircraft transportation. Since deregulation emerged, increase competition, pressure on low cost airfares, fuel price volatility and global economic recession have forced major airlines out of business leading to the rise of low cost carriers. In past few decades, the most successful and profitable airline have historically had the lowest cost structure. Recently, ultra-low cost airlines have seen unanticipated years of growth and expansion. Since 2003, allegiant airline has seen its schedule revenue grow 32 times, and its profit grow 66 times (compared to 3x for southwest, 3x for EasyJet, 5x for Ryanair since 2003). This study aims to study the financial reasons behind the cost structure of ultra-low cost airlines compared to their low cost peers. Plus, it will also examines the economic feasibility of an ultra-low cost airline smaller than the industry minimum by designing a financial model to determine way to yield higher profits

 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.