Low-Cost Carriers and Airports: A Complex Relationship

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.

Citation

Beria, P., Laurino, A. and Nadia Postorino, M. (2017), "Low-Cost Carriers and Airports: A Complex Relationship", The Economics of Airport Operations (Advances in Airline Economics, Vol. 6), Emerald Publishing Limited, Leeds, pp. 361-386. https://doi.org/10.1108/S2212-160920170000006014