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 pr..
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
