In this paper we study the relationship between airport efficiency and two factors: an
airport’s centrality in the EU network, and the intensity of competition from alternative
airports in the same catchment area. We apply a two-stage econometric model based on the
Simar & Wilson (2007) bootstrap procedure to a balanced sample of 57 European airports.
We also design and compute our own measures of airport centrality and competition. The
results show that efficiency is positively related to centrality in the European network, as
measured by a weighted sum of minimal paths passing through the airport in question. The
intensity of competition between airports also has a positive effect on efficiency. Our
analysis suggests that air transportation policies should focus on increasing competition
within important catchment areas (e.g., by investing in infrastructure facilitating access to
alternative airports) and enhancing the connectivity of the EU network (e.g., by subsidizing
new point-to-point connections between airports with capacity to spare)