The Influence of the Increasing Share of the Low-Cost Carriers on the Network Carriers' Strategy in the U.S. Airline Industry

Abstract

The purpose of this study is to clarify the NWCs' strategy to respond the increasing share of LCCs during the post-911 period in the U.S. airline industry. In the U.S. airline industry, yield has precipitated by the demand shock after the 911 and even after the economy recovered, the yield has never restored. LCCs could lower their yield while keeping their profitability because during the late 1990's LCCs have lowered their cost. In order to survive, NWCs have lowered the costs, decreased the number of small-size aircraft, increased the average stage length and improved the load factor.