Title

Entry patterns of low-cost carriers in Hong Kong and implications to the regional market

Document Type

Journal article

Source Publication

Journal of Air Transport Management

Publication Date

8-13-2016

Volume

Advance online publication

Publisher

Pergamon Press

Keywords

Traffic volume changes, Route entry, Low-cost carriers, Hong Kong

Abstract

This study aims to provide a better understanding of Asia's low-cost carriers (LCCs) by empirically analysing their route entry patterns in Hong Kong. Two alternative models have been tested, namely a standard probit model and a generalized least squares estimation. Consistent findings from the two models suggest that LCCs in Asia have a preference for large markets with big populations, high incomes and high traffic volume. On the other hand, the dominance of incumbent full service airlines (FSAs), fierce route competition and the lack of secondary airports are not critical to the growth of LCCs. However, government regulations and airport access are main impediment factors. Despite the adoption of long-distance low-cost models by the region's airlines, geographic distance still plays an important role in LCCs' entry decisions. For the growth of low-cost travel and associated benefits in the tourism industry and overall economy, it is important for governments in the region to liberalize aviation markets, provide sufficient airport capacity, and promote efficient allocation of airport slots.

DOI

10.1016/j.jairtraman.2016.08.001

Print ISSN

09696997

E-ISSN

18732089

Publisher Statement

Copyright © 2016 Elsevier Ltd. All rights reserved. Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Recommended Citation

Wang, K., Tsui, K. W. H., Liang, L., & Fu, X. (2016). Entry patterns of low-cost carriers in Hong Kong and implications to the regional market. Journal of Air Transport Management. Advance online publication. doi: 10.1016/j.jairtraman.2016.08.001