Market entry of a low-cost airline and impacts on the Brazilian business travelers

Market entry of a low cost airline and impacts on the Brazilian business travelers

Journal: Air Transport Management

Author: Fabio Evangelho, Cristian Huse, Alexandre Linhares

Published: 2006

Abstract

The wave of airline deregulation has brought out a worldwide phenomenon: low-cost carriers. A recent case is that of Brazil where after 3 years of operation Gol has 20% of the domestic market. The paper investigates whether there is a significant distinction between the market segment of business travelers using the low-cost entrant and those using the full-service carriers, and also looks at the perception of these travelers regarding the key attributes of the services offered. The findings indicate that there is segmentation in the business travel market, suggesting that the preference for traditional airlines is largely a matter of culture of larger organizations, rather than reflecting any type of prejudice concerning the low-cost model. The results are compared to similar studies conducted with UK business travelers.

Keywords: Low-cost airlines, Business travel market, Cross-market comparisons, Industrial organization

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