From Exclusivity to Accessibility: Examining the Shift from Luxury Aviation to Mass Transit and its Impact on Cost Structures

Abstract

The aviation sector has experienced a fundamental change in the last several decades as it developed as one of the most exclusive types of service consumed by wealthy travellers to the means of mass transport. Deregulation, technological change, and the rise of low-cost carriers (LCCs) largely brought about this change as they changed how airlines operated and the current cost structure. The current paper explores the luxury aviation to mass transit transformation and the effects it had on the cost of operation of the airlines, policies, and the availability of the market. The study has taken the descriptive analytical methodology using secondary sources gathered in the form of academic journals, aviation industry reports, and financial publications of global aviation associations. The trends that are emphasized in the analysis include the expansion in air passenger traffic globally, the rise in the market share of low-cost carriers, the falling real prices in airfare and variations in the cost constituents of airline. The results suggest that the airlines have embarked on operational models that are efficiency driven such as the standardization of fleet, increased aircraft utilization and dependence on ancillary sources of revenues as a means of surviving the competitive market. The study concludes that democratization of air travel has transformed the economic framework of the aviation sector to be more accessible and at the same time alleviated the competition and management of cost issues among the airlines.