Economics

Permanent URI for this collection

Now showing 1 - 1 of 1

What are the Determinants of Profitability in the European Low Cost Aviation Industry
(2009) Shah, Karan; Banerjee, Biswajit
This paper studies the factors influencing the profitability of European budget airlines through a detailed analysis of three airlines: Ryanair, EasyJet and SkyEurope. It begins by defining budget airlines and examining their origins in Europe. It then looks at previous studies that determine factors that influence the rate of return in aviation. It then undertakes a detailed analysis of the airlines' performance from 2000 to 2008. The study concludes by identifying the factors that influence profitability in this industry. They are giving employees stock options, discouraging unions, outsourcing or relocating jobs to countries with lower labor costs, fuel hedging, adopting more fuel-efficient aircraft, outsourcing maintenance to countries with lower labor costs, improving management, a clear cut business strategy, a high load factor, the ability to generate ancillary revenue, size, scale and first mover advantage.