Dynamics in the European Air Transport Network, 2003-9 : an explanatory framework drawing on stochastic actor-based modeling

In this paper, we outline and test an explanatory framework drawing on stochastic actor-based modeling to understand changes in the outline of European air transport networks between 2003 and 2009. Stochastic actor-based models show their capabilities to estimate and test the effect of exogenous and endogenous drivers on network changes in this application to the air transport network. Our results reveal that endogenous structural effects, such as transitivity triads, indirect relations and betweenness effects impact the development of the European air transport network in the period under investigation. In addition, exogenous nodal and dyadic covariates also play a role, with above all the enlargement of the European Common Aviation Area having benefitted its new members to open more air routes between them. The emergence of major low-cost airline-focused airports also significantly contributed to these changes. We conclude by outlining some avenues for further research

The Impact of the Post-Liberalisation Growth of LCCs on the Tourism Trends in Spain

This paper describes the basic characteristics of low cost companies (LCCs) and their expansion in Spain, one of the most popular tourist destinations in the world according to the World Tourism Organization. Using a demand perspective, the evolution of LCCs and the main implications for the tourism marked between 2000 and 2005 are analysed. The evident tendency of Low-Cost companies towards a marked growth in the number of passengers is contrasted with the evident stagnation of traditional or full service companies. The results of the analysis also show that highly significant trends related to the development of LCCs include the growing use of the Internet as an information search engine and tool for booking and paying for tourist services, the substitution of traditional holiday packages (travel and transport) for direct booking systems and a reduction in the length of stays at a destination.

Low-cost carriers and airports: a complex relationship

In the last decades, low-cost carriers have generated several changes in the air market for both passengers and airports. Mainly for regional airports, low-cost carriers 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 low-cost carriers and airports is rather complex and the outcomes not always predictable. In order to analyse 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 organisation (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 analysed. 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

Low-Cost Airlines: Bringing the EU closer together. CEPS Research Report, 15 May 2018

European air travel has witnessed a tremendous evolution since the late 1990s following the liberalisation process, with many new entrants to the market. Several of these new entrants are low-cost carriers (LCCs), offering lower fares and thereby making air transport accessible to a larger number of people. This broader access and increased connectivity have the potential to bring people and regions closer together in Europe. Against this background, the objective of the current report is to understand to what extent, and through which channels, LCCs have contributed and can contribute to European integration. Relying on a mixed set of approaches including desk research and data analysis based on quantitative and qualitative data sources, the study initially sets out the evolution of the air travel market in terms of the regulatory framework and economic principles. It then moves on to a mapping exercise showing the sharp increase in the number of air passengers carried over the last few decades and the large, yet still uneven, increases in seat capacity across Europe. The network of routes, thanks to point-to-point connections as the main focus of LCCs, has also expanded over time. Overall, the evidence from the literature and data analysis points to the enhancement of connectivity resulting from the entry of LCCs into the market. As regards the channels through which LCCs can foster European integration, the study examines the significant increase in labour mobility, business travel, international student mobility and leisure tourism and their close links with corresponding developments in air travel and affordable fares in an expanded network of routes throughout Europe. Qualitative data analysis based on LCC passenger interviews also reveals interesting travel patterns, reflecting a combination of personal preferences, family circumstances and career decisions. These results largely confirm the quantitative analysis and findings from the literature highlighting the contribution of LCCs to European integration through various channels, e.g. labour mobility, business commuting, international student commuting and leisure/tourism travel, as identified and analysed in the study

Air transport liberalisation and airport dependency: developing a composite index

Air transport liberalisation in Europe has produced some major changes to the networks operated by airlines and the services available at airports. Within this context the degree of airport dependency in terms of market, spatial and temporal concentration is important to know from an economic geography and risk management perspective. A composite index called the Airport Dependency Index (ADI) is developed to measure airport dependency based on the concept of the relative Gini coefficient. Liberalisation has had varying impacts depending on the size and type of airport and so a comparison is made of the degree of dependency at a large sample of European airports using the ADI. The ADI has the potential to provide insight on the sustainability and worthiness of financing airport projects, and on whether airports should diversify further their activities by investing in the growth and expansion of their network

Assessment of the Evolving Low-Cost Business Model for the Future Importance of U.S. Secondary Airports

Airline deregulation caused a profound reshape in the aviation industry. The liberalization of the aviation sector resulted in a favorable environment for the emergence of low-cost carriers (LCCs). Following deregulation, airlines saw many attempts at their business strategies to gain more passengers in the air transportation market. To capture additional market shares of passenger traffic, the business models of LCCs have evolved to mirror the more common business models employed by the traditional legacy airlines. The purpose of this paper was to examine what effect, if any, exists between LCCs’ market share of passenger enplanements at secondary airports and their business models in a multi-airport system in the U.S. between the years of 1997 to 2017. A chi-square test was used to determine if the change in LCCs’ business model was significant, while descriptive analysis, including socioeconomic, demographic, and comparative analyses, was used to explain these changes. The findings of this study suggested that LCCs’ market share of passenger enplanements at U.S secondary airports was significant, partially because of the change in their business models. However, a combination of factors, including an increase in population, employment, and personal incomes, may have contributed to this significant finding

Does privatization spur regulation?Evidence from the regulatory reform of European airports

This paper conducts an empirical analysis of the relationship between privatization and regulation drawing on data from a wide sample of European airports. We find that privatization promotes a shift from basic regulation to a situation of more detailed or non-regulation, depending on the specific characteristics of the privatization process and on the type of airport being privatized. Moreover, we report a significant association between high traffic volumes and more detailed regulation. By contrast, airports where slot allocation is noncoordinated are significantly associated with non-regulation.Privatization; regulation; air transportation; airports JEL classification: L33; L42; L93;

Evolving airline and airport business models

Document type: Part of book or chapter of boo