A Tale of Airline Competition: When FSCs Undercut LCCs Fares

The purpose of the paper is to investigate the occurrence of low-cost carriers (LCCs) sometimes offering higher fares than full service carriers (FSCs) on competing flights (an observable fact scarcely explored within current literature). Utilizing a data set expressly collected for this purpose, we are able to quantify its frequency and to hint at some possible explanations of it. All in all, these concur to cast some doubts on the widely held preconception of vertical differentiation between LCCs’ and FSCs’ offered services. Further research will be needed in order to grasp the relative weight of the supposedly alleged factors.