low-cost involved over the whole sample period or the existence of low-cost carriers are too short to be taken into account. For these routes, it is hardly to indicate the entry impact on pricing and passenger traffic. After skipping this kind of routes, 49 city-pairs are left. Then, two line graphs representing the change of price and passengers after the low-cost airlines entering the route are performed. First, according to the Appendix 1, 22 out of 49 routes prove that when the low-cost airlines enter a particular market, the price on such route declines and keep the low level. Moreover, among 22 city-pairs, routes with long-distance capture the deeper impact than those short-distance routes do. In other words, the air fares on the long-distance routes decline more than those on the short routes. The graph (Appendix 1) shows the movements of the price in the four quarters before and after the entry including all 22 city-pairs. Here, Figure 4.3 only takes the route between New York and Seattle as an example. As seen in the figure, at the entry quarter, the price decreases by 40% of the highest pre-entry price, from 441 to 265 dollars. Then, the price keeps stable in the trend of declining although there is a slight stage back at the second quarter after entry. Nevertheless, this result is less than the outcome got by Windle & Dresner in 1995, almost 50% decrease after entry. Besides, the price decline of the city-pair of New York-Seattle is already the largest among the 22 routes depending on the graph (Appendix 1). Figure 4.3 One-way prices pro and post entry Furthermore, the situation of the passenger traffic is illustrated in Appendix 2. It is unpleasant to see that only 16 routes amongst 49 routes are considerably increasing after the low-cost enter such routes. In addition, there is no clue that the entry of low-cost carriers impacts the passenger traffic depending on the distance. How much that the passenger traffic influenced by the entry is random walk among these 16 routes. However, 14 of 16 routes are the routes those also sufficiently affected by the entry in the one-way price figure. It seems that the entry of low-cost airlines has simultaneous effect on both price and passenger traffic. Taking Ft. Lauderdale-New York route as an instance, Figure
low-cost involved over the whole sample period or the existence of low-cost carriers are too short to be taken into account. For these routes, it is hardly to indicate the entry impact on pricing and passenger traffic. After skipping this kind of routes, 49 city-pairs are left. Then, two line graphs representing the change of price and passengers after the low-cost airlines entering the route are performed. First, according to the Appendix 1, 22 out of 49 routes prove that when the low-cost airlines enter a particular market, the price on such route declines and keep the low level. Moreover, among 22 city-pairs, routes with long-distance capture the deeper impact than those short-distance routes do. In other words, the air fares on the long-distance routes decline more than those on the short routes. The graph (Appendix 1) shows the movements of the price in the four quarters before and after the entry including all 22 city-pairs. Here, Figure 4.3 only takes the route between New York and Seattle as an example. As seen in the figure, at the entry quarter, the price decreases by 40% of the highest pre-entry price, from 441 to 265 dollars. Then, the price keeps stable in the trend of declining although there is a slight stage back at the second quarter after entry. Nevertheless, this result is less than the outcome got by Windle & Dresner in 1995, almost 50% decrease after entry. Besides, the price decline of the city-pair of New York-Seattle is already the largest among the 22 routes depending on the graph (Appendix 1). Figure 4.3 One-way prices pro and post entry Furthermore, the situation of the passenger traffic is illustrated in Appendix 2. It is unpleasant to see that only 16 routes amongst 49 routes are considerably increasing after the low-cost enter such routes. In addition, there is no clue that the entry of low-cost carriers impacts the passenger traffic depending on the distance. How much that the passenger traffic influenced by the entry is random walk among these 16 routes. However, 14 of 16 routes are the routes those also sufficiently affected by the entry in the one-way price figure. It seems that the entry of low-cost airlines has simultaneous effect on both price and passenger traffic. Taking Ft. Lauderdale-New York route as an instance, Figure