Proposition of a mathematical model for selecting possible low-cost airlines routes

摘要

This paper examines the effects that low-cost carriers (LCC's) produce when entering new routes operated only by full-service carriers (FSC's) and routes operated by low-cost carriers in competition with full-service carriers. A mathematical model has been developed to determine what routes should be operated by a low-cost carrier with better possibilities to subsist, as a first step towards reaching the most convenient route; additional factors must be considered after running the proposed model, such as route passenger demand and aircraft characteristics not took into account in this paper. The proposed model was set up by analyzing The United States domestic air transport market. Distance is the only variable taken into account by the model. This model analyses the relation between the real fare data ($) and the distance (miles). The model generates three lines that includes amongst them 68% of the approximately 18,000 routes by calculating a standard deviation and estimates the minimum, maximum and average fare for a low-cost carrier given the distance the model determines in which routes a low-cost carrier could be successful by comparing, route by route, different airline fares against the low-cost minimum, maximum and average fare estimated per distance.