The evolution of low cost carriers in Australia

Abstract

Due to the vast distances across the country as well as between urban centres, Australia is heavily reliant upon its air transport industry. Following deregulation of Australia's domestic air travel market on the 30th October, 1990, low cost carriers have entered the market. Australia's LCC market has had three discrete phases. The first wave occurred between 1990 and 1993 and was subsequently followed by a duopoly period in 1994–1999. The second wave occurred between 2000 and 2006 and the final wave has been in the post-2006 period. This paper examines the evolution of Australia's domestic low cost carrier airline market and finds that by 2010, low cost carriers had captured around 64 per cent of the market. Following the evolution of the “Virgin Australia” business model from a low cost carrier to a full service network carrier, commencing in 2011, the low cost carrier's market share has declined significantly and is now around 31 per cent. “Jetstar” and “Tiger Airways” are the two major carriers presently operating in this market segment.

Keywords:

• Australia
• airlines
• business model
• aviation policy
• low-cost carriers

Additional information

Notes on contributors

Panarat Srisaeng

Panarat SRISAENG

Education: bachelor of economics, Chulalongkorn University, Bangkok, Thailand, 1993.

Master of business economics, Kasetsart University, Bangkok, Thailand, 1998.

Affiliations and functions: PhD (candidate) in aviation, RMIT University, School of Aerospace, Mechanical and Manufacturing Engineering.

Research interests: low cost airline management; demand model for air transportation; demand forecasting for air transportation.

Glenn S. Baxter

Glenn S. BAXTER, PhD

Education: bachelor of aviation studies, the University of Western Sydney, Australia, 2000. Master of aviation studies, the University of Western Sydney, Australia, 2002. PhD, School of Aviation, Griffith University, Brisbane, Australia, 2011.

Affiliations and functions: Lecturer in Aviation Management and Deputy Manager of Undergraduate Aviation Programs, at RMIT University, School of Aerospace, Mechanical and Manufacturing Engineering.

Research interests: air cargo handling and operations; airport operations and sustainability; supply chain management.

Graham Wild

Graham WILD, PhD

Education: 2001–2004 – bachelor of science (Physics and Mathematics), Edith Cowan University. 2004–2005 – bachelor of science honours (Physics), Edith Cowan University. 2008 – Graduate Certificate (Research Commercialisation), Queensland University of Technology. 2006–2008 – master of science and technology (Photonics and Optoelectronics), the University of New South Wales. 2006–2010, PhD (Engineering), Edith Cowan University.

Affiliations and functions: 2010, Postdoctoral research associate, Photonics Research Laboratory, Edith Cowan University. 2011–2012, lecturer of aviation systems, Edith Cowan University. 2012 – present, senior lecturer in Aerospace and Aviation, RMIT University, School of Aerospace Mechanical and Manufacturing Engineering.

Research interests: aircraft systems; aerospace vehicle structural health monitoring; optical fibres; sensing and instrumentation; sustainable aviation; aviation technology.

Publications: author of 8 articles, 4 conference presentations.

Present position: 2014 – present, aviation program manager, RMIT University, School of Aerospace Mechanical and Manufacturing Engineering.