by fully liberalizing pricing, market entry, and scheduling, the Airline Deregulation Act of 1978
changed the US airline industry in fundamental ways. One of the most important developments in the
post-deregulation era was the successful emergence of the low cost carrier (LCC) business model.
Pioneered by Southwest Airlines as early as 1971, when competition was limited to intrastate markets, the LCC
model is characterized by certain features that result in low operating costs relative to the full service carrier (FSC)
model. The LCC model can be succinctly described as featuring no-frills passenger service within a point-to-point
network of short and medium-haul routes that serve secondary airports, using a highly productive homogenous fleet.
On the other hand, the ‘legacy carriers’, often referred to as ‘full-service carriers’ or ‘network carriers’, operate huband-
spoke networks, deploying multiple aircraft types in short and long-haul routes, and offering a higher class
product overall.