The market entry of low cost airlines (LCA): Implications for mode choice between Switzerland and Germany

Abstract

This paper is about drivers of mode preferences on medium range travel (500 - 1'000 km), both including a full range of modes. The past 2 years, a number of low cost airlines (LCA) have entered the Swiss market, targeting at selected routes between Switzerland and Germany. Other than with regard to traffic between Switzerland and the UK, where LCA such as Easyjet and Ryanair have taken market shares from mainly traditional network airlines only (rationale: geography and distance on those routes) or have generated new traffic, travel between Switzerland and Germany has been domi-nated by car and train. With LCA entering the Swiss market, it can be hypothesised that mode choice on the routes offered by them has substantially changed. Based on a situational approach (2 situations, characterising the demand side) and a number of actual offerings set up for selected routes (characterising the supply side), the study tries to identify drivers of a stated ranking of preferences, operationalised by an OLS regression of at-tributes towards the very. The database was generated by a survey in Switzerland and Germany in September 2003 and consists of 1'000 representatively selected persons (500 from each Swit-zerland and Germany). The 2 situations presented consisted of a trip from Zurich to Berlin (1; incorporating direct means of transport) and from Freiburg i.Br. to Leipzig (2, incorporating means of transport with changes/ transfers necessary along the route.). The key drivers revealed to be relevant for the ranking of given options are travel time, flexibil-ity, comfort, travel costs and safety. The preference to use LCA is basically raised by the wish to use the least travel time as possible and sympathy towards those new business models (incl. their marketing message).