Rapid capacity expansions and failure: A trap for new airline?

• Main Authors: FAN, Terence Ping Ching, TAN, Alex Tai Loong, GENG, Xuesong
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: capacity; expansion; airline; entrant; failure; survival; Strategic Management Policy; Transportation
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/4599; https://doi.org/10.1016/j.tre.2013.11.002
• Institution: Singapore Management University

This paper investigates whether fast capacity expansions as a means to narrow cost differentials between a de novo airline entrant and established incumbents helps or hinders the survival of the entrant. Evidence from a longitudinal sample of new entrants in the European passenger airline industry s...