Entry and Exit by European Low-Cost and Traditional Carriers

Abstract

The authors analyse the entry and exit activity in the UK–Europe airline markets and study the differential traits of three main airlines (British Airways, EasyJet and RyanAir) during1997–2004. They find that entry and exit are more likely in large markets and in markets with a high number of incumbents. Already operating in the city-pair enhances the probability that the same firm will enter another route in the same city-pair. The existence of charter flights generates both entries and exits, while high seasonality generally discourages entry. Also, the level of service quality provided by the incumbents matters.

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