ABSTRACT
The emergence of the low cost airline has had massive implications for the growth of tourism. Low cost airlines have brought large reductions in price and large increases in the number of seats available. The UK Civil Aviation Authority (2006a) found that between 1996 and 2005 international passenger numbers between the UK and the EU by low cost airlines increased from 3.1m to 51.5m. Full service airline passengers increased from 42.2m to 47.2m and charter passengers grew from 23.8m to 25m. 89 per cent of the growth of 54.6m passengers in this market was on no frills airlines. Full service and charter shares of the growth were 9 per cent and 2 per cent respectively. The CAA also noted (2006b: 3.3) that “since 2000, both charter and full-service carriers have seen flat or declining demand” as the market share of low cost airlines has increased more rapidly in the new millennium. A regulatory system based on the exclusion of new entrants, non-price competition and capacity sharing between monopolistic national airlines has been replaced by a competitive market with significant benefits to the wider economy in terms of lower prices, a better range of services in the market and large increases in productivity in the aviation sector.
