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Low-Cost Carriers and Airports: A Complex Relationship

In: The Economics of Airport Operations

Author

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  • Paolo Beria
  • Antonio Laurino
  • Maria Nadia Postorino

Abstract

In the last decades, low-cost carriers (LCCs) have generated several changes in the air market for both passengers and airports. Mainly for regional airports, LCCs have represented an important opportunity to improve their connectivity levels and passenger traffic. Furthermore, many regional airports have become key factors to regenerate the local economy by improving accessibility and stimulating several markets, such as tourism. However, the relationship between LCCs and airports is rather complex and the outcomes not always predictable. In order to analyze and understand better such relationship and its outcomes, this chapter discusses the main underlying factors identified in: relation with the regional air market (secondary/primary airports), balance of power (dominated/non-dominated airports), and industrial organization (bases/non-bases). Starting from the proposed Relative Closeness Index, which combines yearly airport passengers and distance between airport pairs, a large sample of European airports is analyzed. Then, a smaller sub-sample – which includes selected, significant case studies referring to mid-sized airports – is discussed in detail. Among the main findings, airports sharing their catchment area with others are in a very risky position, due to the potential mobility of LCCs, while geographically isolated airports in good catchment areas can better counterbalance the power of carriers.

Suggested Citation

  • Paolo Beria & Antonio Laurino & Maria Nadia Postorino, 2017. "Low-Cost Carriers and Airports: A Complex Relationship," Advances in Airline Economics, in: The Economics of Airport Operations, volume 6, pages 361-386, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:aiaezz:s2212-160920170000006014
    DOI: 10.1108/S2212-160920170000006014
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    Citations

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    Cited by:

    1. Ruiz-Moreno, Felipe & Mas-Ruiz, Francisco J. & Sancho-Esper, Franco M., 2021. "Strategic groups and product differentiation: Evidence from the Spanish airline market deregulation," Research in Transportation Economics, Elsevier, vol. 90(C).

    More about this item

    Keywords

    Low-cost carriers; regional airports; airport–airline relationship; Relative Closeness Index; C43; L93; R4;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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