Entry and exit by European low-cost and traditional carriers

The authors analyse the entry and exit activity in the UK-Europe airline markets and study the differential traits of three main airlines (British Airways, EasyJet and RyanAir) during 1997-2004. They find that entry and exit are more likely in large markets and in markets with a high number of incumbents. Already operating in the city-pair enhances the probability that the same firm will enter another route in the same city-pair. The existence of charter flights generates both entries and exits, while high seasonality generally discourages entry. Also, the level of service quality provided by the incumbents matters.