Serving vs. settling: What drives the establishment of low-cost carriers’ foreign bases? |
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| Institution: | 1. University of Cologne, Department of Corporate Development and Organization, Albertus-Magnus-Platz, 50923 Cologne, Germany;2. University of Southern Denmark, Department of Border Region Studies, Alsion 2, 6400 Sønderborg, Denmark;3. Massachusetts Institute of Technology, Laboratory for Aviation and the Environment, 77 Massachusetts Avenue, Cambridge, MA 02139, United States;1. Università della Valle d’Aosta, Grand Chemin 73/75, 11020 Saint Christophe (AO), Italy;2. Department of Economics and Management, University of Pavia, Via S. Felice 5, 27100 Pavia, Italy;3. Keele Management School, Keele University, Keele, Staffordshire, ST5 5BG, United Kingdom;1. Department of Supply Chain and Information Management, School of Decision Sciences, Hang Seng Management College, Hang Shin Link, Siu Lek Yuen, Shatin, NT, Hong Kong;2. Sauder School of Business, University of British Columbia, 2053 Main Mall, Vancouver, BC, V6T 1Z2, Canada;1. College of Civil Aviation, Nanjing University of Aeronautics and Astronautics, Nanjing, China;2. Department of Geography, Ghent University, Gent, Belgium;3. Geography & Earth Science Department, Shippensburg University, Shippensburg, PA, USA;1. INESC TEC and Faculdade de Engenharia da Universidade do Porto, Rua Dr. Roberto Frias, 4200 – 465, Porto, Portugal;2. Universidad de Ibagué, Facultad de Ingeniería, Carrera 22 Calle 67, 730002, Ibague, Colombia;3. Massachusetts Institute of Technology, Institute for Data, Systems, and Society, 77 Massachusetts Ave. 02139-4307, Cambridge, MA, USA;1. College of Business and Administration, University of New Orleans, New Orleans, LA 70148, USA;2. Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA |
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| Abstract: | This paper uses a probit model on a cross-sectional dataset of 202 airports and 29 airlines to assess the drivers for the establishment of foreign bases by European low-cost carriers (LCCs). We find that managerial, organizational, and environmental factors impact on foreign base establishment. In particular, there is evidence that the presence of a growth-oriented firm leader and the strategic importance of an airport for an airline significantly increase the probability of the presence of bases, while national unit labor costs, the volatility of flight operations and the membership of an LCC in an airline group significantly decrease this probability. |
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| Keywords: | Low-Cost Airlines Internationalization Strategy Foreign Direct Investment Foreign Bases |
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