• A
  • A
  • A
  • ABC
  • ABC
  • ABC
  • А
  • А
  • А
  • А
  • А
Regular version of the site
For visually-impairedUser profile (HSE staff only)SearchMenu

The Optimal Market Entry Strategies of Low-cost Carriers: the Case of Russian Passenger Airlines

Student: Anna Shrainer

Supervisor: Anastasia Antsygina

Faculty: St.Petersburg School of Economics and Management

Educational Programme: Economics (Bachelor)

Year of Graduation: 2019

This paper aims to identify the optimal market entry strategies of Russian airlines and especially, low cost carriers (LCCs). The study focuses on how a carrier with cost advantage selects a model detecting the most profitable route for entry and analyses what it implies for consumers’ utility. Our theoretical model shows that the most profitable route for a company with a LCC is the route where the only one incumbent carrier operates. To match theoretical results with the data, we sample air fares for the period of September 25, 2018 to January 25, 2019 and estimate how they depend on the presence of an LCC on the route. The results demonstrate that for such routes, the average price declines by 35% that may involve passengers from a lower price segment. However, the only Russian carrier with cost advantage mostly operates in European part of the country that signals the government should enforce the LCC to be present at routes in Central and Asian parts or incentivize the establishment of new LCCs.

Student Theses at HSE must be completed in accordance with the University Rules and regulations specified by each educational programme.

Summaries of all theses must be published and made freely available on the HSE website.

The full text of a thesis can be published in open access on the HSE website only if the authoring student (copyright holder) agrees, or, if the thesis was written by a team of students, if all the co-authors (copyright holders) agree. After a thesis is published on the HSE website, it obtains the status of an online publication.

Student theses are objects of copyright and their use is subject to limitations in accordance with the Russian Federation’s law on intellectual property.

In the event that a thesis is quoted or otherwise used, reference to the author’s name and the source of quotation is required.

Search all student theses