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Article
Entry patterns of low-cost carriers in Hong Kong and implications to the regional market
Journal of Air Transport Management
  • Kun WANG
  • Wai Hong, Kan TSUI
  • Liping LIANG, Lingnan University, Hong Kong
  • Xiaowen FU
Document Type
Journal article
Publication Date
8-13-2016
Publisher
Pergamon Press
Keywords
  • Traffic volume changes,
  • Route entry,
  • Low-cost carriers,
  • Hong Kong
Disciplines
Abstract
This study aims to provide a better understanding of Asia's low-cost carriers (LCCs) by empirically analysing their route entry patterns in Hong Kong. Two alternative models have been tested, namely a standard probit model and a generalized least squares estimation. Consistent findings from the two models suggest that LCCs in Asia have a preference for large markets with big populations, high incomes and high traffic volume. On the other hand, the dominance of incumbent full service airlines (FSAs), fierce route competition and the lack of secondary airports are not critical to the growth of LCCs. However, government regulations and airport access are main impediment factors. Despite the adoption of long-distance low-cost models by the region's airlines, geographic distance still plays an important role in LCCs' entry decisions. For the growth of low-cost travel and associated benefits in the tourism industry and overall economy, it is important for governments in the region to liberalize aviation markets, provide sufficient airport capacity, and promote efficient allocation of airport slots.
DOI
10.1016/j.jairtraman.2016.08.001
E-ISSN
18732089
Publisher Statement
Copyright © 2016 Elsevier Ltd. All rights reserved. Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Citation Information
Wang, K., Tsui, K. W. H., Liang, L., & Fu, X. (2016). Entry patterns of low-cost carriers in Hong Kong and implications to the regional market. Journal of Air Transport Management. Advance online publication. doi: 10.1016/j.jairtraman.2016.08.001