Low Cost Carriers' Penetration: A Comparative Case Study of Greece Spain

摘要

Low Cost Carriers have penetrated the European Airline Market since the early 90s when the deregulation of the European airspace started spreading throughout the continent influencing the regional airline network behaviour. The innovative business idea of providing travelers with considerably cheaper airline tickets by diminishing the “onboard” frills along with pioneering pricing policies, experienced rapid expansion in many European countries. By studying the air traffic statistics we aim to quantify the Greek & Spanish airline market characteristics, the level of LCCs penetration in both countries and the impact upon traditional flag carriers. This paper asks whether the evolution and the growth that LCCs accomplished in Spain, have respective potentials in Greece. In particular, we investigate which Greek tourism destinations currently not served on a regular basis by LCCs, are the most likely to be included in the European LCCs operation network. The situation concerning air transport and tourism infrastructure in Southeast Europe indicates that the region is mature enough to welcome new entrants together with the network expansion of the LCCs currently operating. Traffic flows to and from Greece have significantly increased lately expanding a market that low cost carriers struggling to take advantage of. This paper concludes by determining the level of LCCs' penetration in Greece and its impacts upon tourism and several key sectors of the Greek economy.