Analysis of Ultra Low-cost Carriers and Airport Choice

Since the mid-2000s, the domestic aviation industry has been influenced by new, rapidly growing ultra low-cost carriers (ULCCs) such as Allegiant Air, Spirit Airlines, and Frontier Airlines. These carriers augment the existing low-cost airline model by operating largely point-to-point routes with a minimum of passenger amenities. Existing literature, however, is limited for North American ULCCs, often lumping them together with mainstream low-cost carriers. The pattern of markets served by ULCCs is incongruous with the models of other airlines and requires further research to examine causal factors. This paper sought to establish conclusions about ULCCs and the relevant market factors used for airport choice decisions.The relationship between ULCC operations and airport choice factors was analyzed using three methods: a collection of 2019 flight data to establish existing conditions and statistics, two regression analyses to evaluate airport market variables, and three case studies examining distinct scenarios through qualitative interviews with airport managers. ULCC enplanement data was assembled for every domestic airport offering scheduled ULCC service in 2019. Independent variable data informed by previous research were collected for every Part 139 airport in the U.S. The first regression analysis estimated a OLS regression model to analyze the log of enplanements. The second model estimated a binary logistic equation for ULCC service as a 0-1 dependent variable. Case studies for Bellingham, Washington, Waco, Texas, and Lincoln, Nebraska were selected based on compelling airport factors and relevant ULCC experience. Results of the research methods confirm certain theories regarding ULCC airport choice, but left others unanswered. Maps of enplanements and market share revealed concentrations of ULCC operations on the East Coast. Each regression analysis showed a strong and positive relationship between population figures and the existence and quantity of ULCC operations. Tourism employment was only significantly related to enplanements. Other factors including distance and competition variables were significantly associated to ULCC service. Case studies revealed the importance of airport fees and costs in ULCC decision-making; factors that proved difficult to investigate quantitatively in this research. Further research may shed light on this complex and ever- changing subset of the domestic commercial aviation industry.