Since low-cost airlines offered lower prices compared to their full-fare
counterparts, one would expect them to develop rapidly and eventually hold a large
part of the market. However, this was not always the case because of severe
competition. Full-fare companies managed to adapt to the market changes that
were caused by low-cost airline companies by lowering their prices and cutting
expenses (GAO 2004). Yet, most full-fare airlines were not willing to abandon
extra services and features, and therefore, still could not match the prices offered
by their competitors. Finally, these two kinds of carriers found a way to co-exist on
the market through providing different level of service at corresponding prices
(Alderigh, Cento et al. 2004). As a result, most of them started to concentrate on
certain groups of customers. Business travelers who normally prefer more
flexibility and comfort have become a main focus for the majority of full-fare
carriers (Garfinkel 2008). On the other hand, leisure travelers, who typically are
not too concerned about additional services, tend to make their choices based on
price levels, therefore becoming target customers for no-frills airlines (Huse and
Evangelho 2007).