The “No Frills” Strategy of Low-Cost Carriers

Table of Contents

1. Introduction

2. Developments in the International Airline Industry

2.1. Historical Developments

2.2. Deregulation and Liberalization of the Airline Industry

2.3. First and Second Memorandum of the European Commission

2.4. The Liberalization Packages of the Europe

2.5. Outcomes of the Liberalization and Deregulation Process

3. The phenomenon of Lo-Cost-Carriers (LCC)

3.1. Introduction to LCC’s

3.2. Development of LCC’s in Europe

3.3. LCC market in Germany

4. Low-Cost-Carrier Marketing Strategy

4.1. LCC Operation

4.2. LCC Network

4.3. LCC Fleet

4.4. Target Market and Customers

4.5. LCC Sales and Pricing

4.6. LCC SWOT Analysis

5. Low Cost Carrier and Effects of Regional Airports

5.1. Introduction

5.2. Effects of Secondary Airports / Definition

6. Airport Frankfurt Hahn and Regional Infrastructure

6.1. Development of the Airport

6.2. Development of the Airport Passenger Terminal’s

6.3. Development of Runway

6.4. Catchment Area of Frankfurt Hahn

6.5. Infrastructure in the Region of Frankfurt Hahn

6.6. Passenger and Cargo Development

6.7. SWOT Analysis of Frankfurt Hahn Airport

7. Regional Effects of Airport Frankfurt Hahn

7.1. Regional Social and Economical Structure

7.2. Impact of Frankfurt Hahn Airport on Employment

7.3. Enterprises at Frankfurt Hahn

7.4. Employment at Frankfurt Hahn and its Region

7.5. Frankfurt Hahn Impact on the Tourism Industry

8. Estimation of the Frankfurt Hahn Airport Economical Effect

9. Conclusion

Objectives and Research Focus

This master thesis examines the impact of the "No Frills" business strategy employed by Low-Cost Carriers (LCCs) on the regional economic development of Frankfurt Hahn Airport, focusing on how this specific airline model stimulates regional infrastructure and employment growth.

• Evolution of the European airline industry following deregulation and liberalization.
• Strategic operational and marketing characteristics of the "No Frills" business model.
• Direct and indirect economic impacts of regional airports on their surrounding catchment areas.
• Analysis of Frankfurt Hahn Airport’s infrastructure development and its subsequent role as a regional economic engine.
• Empirical assessment of tourism and employment growth linked to the airport's operations.

Excerpt from the Book

Chapter Summary

1. Introduction: Presents the scope of the thesis, focusing on the changes in the European aviation market and the specific role of LCCs at Frankfurt Hahn Airport.

2. Developments in the International Airline Industry: Details the historical path of airline deregulation and the implementation of EU liberalization packages that enabled the LCC business model.

3. The phenomenon of Lo-Cost-Carriers (LCC): Introduces the "No-Frills" concept, its expansion in Europe and the specific development of the German LCC market.

4. Low-Cost-Carrier Marketing Strategy: Analyzes the core components of LCC business models, including fleet strategy, point-to-point network structures, and cost-efficient sales methods.

5. Low Cost Carrier and Effects of Regional Airports: Defines the economic linkages between low-cost flight operations and regional development, including direct, indirect, and induced effects.

6. Airport Frankfurt Hahn and Regional Infrastructure: Chronicles the infrastructural growth of Frankfurt Hahn and its transition into a key regional hub.

7. Regional Effects of Airport Frankfurt Hahn: Examines the tangible regional impacts, specifically regarding employment, enterprise settlement, and the local tourism industry.

8. Estimation of the Frankfurt Hahn Airport Economical Effect: Provides an input-output analysis quantifying the financial and employment contributions of the airport to the region.

9. Conclusion: Summarizes the findings, reinforcing that the LCC strategy has been a vital driver for both the airport’s success and the broader regional economic uplift.

Keywords

Low-Cost Carriers, No-Frills, Frankfurt Hahn Airport, Aviation Liberalization, Regional Economics, Airport Infrastructure, Employment Growth, Tourism, Point-to-Point Network, CASK, RASK, Airline Strategy, Regional Development, Ryanair, Air Travel.

Frequently Asked Questions

What is the primary focus of this research paper?

This paper investigates the rise of Low-Cost Carriers (LCCs) in Europe and their specific role as a driver for regional economic growth, with a dedicated case study of Frankfurt Hahn Airport.

What are the central thematic fields covered?

The central themes include airline industry deregulation, the operational structure of "No-Frills" airlines, the impact of secondary airports on regional economies, and the specific infrastructural and economic developments at Frankfurt Hahn.

What is the main objective of the study?

The primary aim is to analyze how the marketing and operational strategy of LCCs has influenced the development of Frankfurt Hahn Airport and the subsequent regional economic benefits for the surrounding area.

Which scientific method is utilized in this paper?

The author uses a combination of literature analysis regarding aviation economics and a quantitative approach through an input-output analysis to estimate the economic and employment effects of the airport.

What topics are discussed in the main body?

The main body covers the history of aviation liberalization, the specific business model of LCCs (fleet, network, pricing), and a comprehensive regional analysis of Frankfurt Hahn, including employment statistics, tourism data, and infrastructural investments.

Which keywords characterize this work?

The work is characterized by terms such as Low-Cost Carriers, No-Frills, Regional Economics, Frankfurt Hahn, and Aviation Liberalization.

How does the point-to-point network differ from the hub-and-spoke system?

Point-to-point networks prioritize direct connections between cities to increase efficiency and decrease turnaround times, whereas hub-and-spoke systems aggregate traffic in central airports to serve a wider range of global destinations.

What role does Ryanair play in the development of Frankfurt Hahn?

Ryanair is identified as a critical success factor, being the primary airline to establish a base at Frankfurt Hahn, which led to a massive increase in passenger numbers and facilitated regional infrastructural growth.

Why are secondary airports essential for the LCC business model?

Secondary airports offer lower handling fees and are typically less congested, which allows LCCs to achieve shorter turnaround times, reduce fuel consumption, and maintain the low-cost structure necessary for their pricing strategy.