Fighting for Flying: The Competition Challenges between Full-Service Network Carriers & Low-Cost Carriers in Latin America and the sustainable strategies to face Low-Cost Competition in the Industry

Details

Supervisors

Michel De Wolf

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

The purpose of this master thesis is to study the competition challenges between the full-service network carriers (FSNC) and the low-cost carriers (LCC) and to provide recommendations for full-service carriers to fight LCC competition. The analysis focuses on understanding the drivers of the competition, the profitability, and the main strategies used by carriers in the Latin American region. The thesis is split into three main parts: a literary review providing a better understanding of the aviation industry, the current state of the Latin American region, the main business models deriving from full-service and low-cost strategies, and the main strategies used by FSNCs to fight LCCs. The practical part is composed of a qualitative analysis focusing on understanding the competitive advantages, strategies, and risks of each carrier; and a quantitative analysis that provides an overview of the financial and operational performance of the different business models and strategies adopted by the carriers. The analysis concluded that the main differentiators of FSNCs in the region are no longer seen as important by customers and that carriers should implement many policies to cut costs. A list of different recommendations is provided.