scholarly journals Effects of Southwest Airlines on Carrier Profits and Entry Probabilities

2021 ◽  
Vol 2021 ◽  
pp. 1-9
Author(s):  
Junqiushi Ren
Keyword(s):  
Nash Equilibrium ◽  
Negative Impact ◽  
Low Cost ◽  
Game Model ◽  
Downward Pressure ◽  
Low Cost Carrier ◽  
Payoff Functions ◽  
New Perspective ◽  
Southwest Airlines ◽  
The U.S

This paper studies the effects of Southwest Airlines, the largest low-cost carrier (LCC) in the U.S., on other carriers’ payoff functions and entry probabilities. A static entry game model is developed and estimated by viewing entry as an indicator of underlying profitability and making use of Nash Equilibrium. Results indicate that Southwest has a remarkable and negative impact on the payoffs of other carriers. This impact is firm-specific, with LCCs being more affected than full-service carriers (FSCs). Comparing the two service types, the results show that Southwest’s nonstop presence apparently imposes more downward pressure on opponents’ profits than its connecting presence. A counterfactual experiment is then conducted. Once Southwest is counterfactually removed, the probability of each carrier entering a market significantly changes. This paper examines Southwest’s impacts from a new perspective and extends literature on entry game estimation.

scholarly journals Time-Series Statistical Model for Forecasting Revenue and Risk Management

2021 ◽  
Vol 10 (3) ◽  
Author(s):  
Mihir Kelkar ◽  
Cosmin Borsa ◽  
Lina Kim
Keyword(s):  
Time Series ◽  
Low Cost ◽  
Moving Average ◽  
Business Strategies ◽  
Annual Reports ◽  
Fiscal Year ◽  
Sarima Model ◽  
Autoregressive Integrated Moving Average ◽  
Low Cost Carrier ◽  
Southwest Airlines

Following a Low-Cost Carrier (LCC) model, Southwest Airlines has consistently demonstrated growing annual revenues up until the start of the COVID-19 pandemic. Southwest’s quarterly revenue shows that there exists a strong seasonal component with the revenue in the first quarter of the fiscal year (September) significantly higher than other quarters. Using the quarterly revenue data we constructed a time-series model: a seasonal autoregressive integrated moving average (SARIMA) model to forecast Southwest’s revenue over 2020. We then performed a cost and solvency risk analysis using the company’s financial results from its annual reports to analyze Southwest’s financial performance due to COVID-19, and proposed business strategies to keep Southwest financially stable.

scholarly journals The Peculiarities of Low-Cost Carrier Development in Europe

Energies ◽  
2020 ◽  
Vol 13 (3) ◽  
pp. 639
Author(s):  
Jolanta Sabaitytė ◽  
Vida Davidavičienė ◽  
Gerard Frederick Van Kleef
Keyword(s):  
Airline Industry ◽  
Low Cost ◽  
Current Situation ◽  
Ideal Solution ◽  
Contemporary Research ◽  
Low Cost Carriers ◽  
Fishbone Diagram ◽  
Low Cost Carrier ◽  
Southwest Airlines

Low-cost carriers (LCCs) have been growing by 11.4% in revenue passenger kilometers over 2017 and changed the airline industry radically. It drove down prices in the industry. Southwest Airlines (USA) designed the LCC blueprint model, and Ryanair copied it within Europe, followed by other airlines. This research aims to fulfill the gap in contemporary research upon LCC successfulness in Europe by a description of the current situation within Europe (2018 and January 2019) and the development issues it faced, which are mapped by the Ishikawa fishbone diagram. Furthermore, to rank the airlines on strength and vulnerability, The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) methodology was used for meeting LCC characteristics and airline success. By comparison of meeting the LCC characteristics and the rank of the successfulness, the results of the TOPSIS analysis showed that the airlines meeting the most LCCs characteristics are seemingly less vulnerable to the development issues that airlines are facing, as Wizz Air and Ryanair are meeting most characteristics and are the most successful. Concluded is that airlines meeting the most LCC characteristics are the least vulnerable to current issues. However, major disruptions can still form an issue and limit growth. This research can be useful for comparing and positioning airlines in the market, based on issues and operational choices.

scholarly journals Hub-And-Spoke Airlines Versus Low-Cost Airlines And Price Discrimination

2010 ◽  
Vol 8 (5) ◽  
Author(s):  
Recai Aydin ◽  
Roger Morefield
Keyword(s):  
Market Segmentation ◽  
Price Discrimination ◽  
Airline Industry ◽  
Low Cost ◽  
Font Size ◽  
Hub And Spoke ◽  
The Face ◽  
Low Cost Carrier ◽  
The Impact ◽  
The U.S

<p class="MsoBodyText" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt; mso-bidi-font-weight: bold;"><span style="font-family: Times New Roman;">The purpose of this study is to examine the impact of the continuing trend in the U.S. Airline industry away from hub-and-spoke (network) airlines and toward low-cost airlines. The model of this study examines the level of success which the network carriers may experience by using market segmentation and price discrimination to sustain profitability in the face of the growth in market share held by low-cost carrier airlines. </span></span></p>

Retrospective on the 1970’s “Low Cost Shore Protection” program

Shore & Beach ◽  
2019 ◽  
pp. 3-12
Author(s):  
Joan Pope
Keyword(s):  
Coastal Erosion ◽  
Low Cost ◽  
Management Strategies ◽  
Public Information ◽  
Coastal Engineering ◽  
Shoreline Erosion ◽  
Shore Protection ◽  
Demonstration Program ◽  
Alternative Approaches ◽  
The U.S

In the 1970s, the U.S. Congress authorized and funded a five-year demonstration program on low-cost methods for shore protection called the “U.S. Army Engineers Shoreline Erosion Control Demonstration (Section 54) Program.” The Section 54 also known as the “Low-Cost Shore Protection” demonstration program is revisited. Demonstration and monitoring sites including the materials, devices, vegetative plantings, approaches tested, and program findings are discussed. Simply put, a major finding of the Section 54 program was that the concept of “low-cost shore protection” was a bit naïve. However, the program did lead to a wealth of public information documents and practical coastal engineering lessons that are still resonating as home owners, communities, and engineers consider alternative approaches for managing coastal erosion. The program structure and findings are applicable 40 years later as consideration is given toward the use of Natural and Nature-based Features (NNBF) for addressing coastal erosion. Evolution in thought relative to coastal erosion and shoreline enhancement activities since the 1970s has built upon many of the lessons and concepts of the Section 54 program and other real-world coastal erosion management success-failure experiences. This growth has led to a modern appreciation that those features that emulate NNBF are promising and responsible alternative coastal erosion management strategies if proper engineering standard elements of design are included in the project.

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