Literature review of the passenger airline business models
Full service carrier, low-cost carrier and charter airlines
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Abstract
The deregulation and liberalization of the air transportation industry have developed three main passenger business models: full service carriers, low-cost carriers, and charter airlines. Deregulation removed regulated fares and routes increasing competition and yields. Airlines business models main objectives are to minimize operation costs and fares, and to maximize profits based on cost leadership, differentiation and focus strategy. This paper presents a literature review about airline business model strategies as a first step to identify the main parameters required for developing a new model. This model should eventually be able to determine the location of the airport as well as the most profitable routes for low-cost airline company.