ABSTRACT
Competition with full service carriers (FSCs) and within the low cost carriers (LCC) sector in the mature markets will help to keep the sector innovative. LCCs in developing markets will contribute to the airline sector and also to the economic development in those regions. Long-haul low-cost carriers find their niche and add to the pressure on full service network carriers. LCCs have exploited travel affluence and played an important role in maintaining growth in otherwise mature markets, boosting air travel in the North American, West European and Australasian markets, where they have played a key role in driving down travel costs. A carriers within carriers (CWC) offers the advantage of a subsidiary with significant lower labour costs and provides a direct competitive response to LCCs already operating or planning to operate in the market. One of the major risk factors for the airline industry and in particular the LCCs is cost of crude oil.
