Low-cost carriers in Australia: experiences and impacts

The history of entry and exit by low-cost carriers in Australia is outlined; two phases of entry are identified, the early 1990s. and the year 2000. The factors influencing success or failure are examined in the light of experience in North America and Europe. The strategies adopted by the low-cost carriers are examined, as are the competitive responses of the incumbents. The impacts made by low-cost carriers on fares, costs and profitability are examined and lessons are drawn from the experience. The likely patterns of competition between Virgin Blue and Qantas are explored along with the scope for more entry. (C) 2003 Elsevier Ltd. All rights reserved.