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Research Paper | Business Management | India | Volume 10 Issue 1, January 2021 | Popularity: 6.5 / 10

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Why Long-Haul Low-Cost Airlines Always Go Bankrupt

Kris Nagdev

Abstract: Since the emergence of the low-cost airline sector, competition and demand have contributed much to this sector. A key question is whether it is enough to say that in terms of profitability, some airlines work better than others in the long-haul low-cost business model and whether this can be the reason for some going bankrupt. This paper uses 10 currently operating long-haul, low-cost airlines to compare their 14 measurable characteristics that might impact their profitability. It also evaluates the farthest these characteristics apply to long-haul sectors. Other factors like route networks adoption, limited potential for demand stimulation, likely competitive response, and the demand for the dense market all combine to cause doubt on long-haul low-cost airlines' success. The key findings include what drives this industry, the industry's state before and after the Covid-19 pandemic, and what might be the reasons for long-haul low-cost carrier bankruptcy.

Keywords: Aviation Industry, Airlines, Long-haul, Low-cost, COVID-19, Segmentation, Targeting, Business, Strategy, Operations, Bankrupt

Edition: Volume 10 Issue 1, January 2021

Pages: 1215 - 1219

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