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UBC Theses and Dissertations

An empirical examination of the Canadian air passenger market : distinguishing the impact of LCC and ULCC market entry Ovesy, Nargess


The emergence of low-cost carriers (LCCs) after U.S. deregulation in 1978 and the more recent developments of ultra-low-cost carriers (ULCCs) has transformed the aviation industry in the United States and Europe. There are numerous studies that examine the impact of LCCs, and subsequently, ULCCs on airfares and air travel demand in both the U.S. and Europe. Recently, researchers have become interested to look into the aviation markets in South East Asia, such as China and Singapore. One reason for this focus in the research could be the availability and transparency of data in these regions. However, for the first time, we now have access to rich and detailed data for the Canadian aviation market spanning from 2014-2019. In this research, we focused on domestic travel within Canada and identify the factors that impact airfares and air travel demand within the country. Additionally, we employ econometric tools to determine the effects of the introduction of Flair an ULCC, as well as Swoop an LCC, into the Canadian aviation market. Furthermore, we have conducted a thorough analysis of the market's price elasticity of demand and have provided reasoning for its lower value compared to the literature's findings in other countries.

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