Airport competition – Regional airports losing ground to main airports

Lian, Jon Inge; Rønnevik, Joachim

doi:10.1016/j.jtrangeo.2009.12.004

Cited by 103 publications

(59 citation statements)

References 19 publications

(33 reference statements)

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“…Button and Stough (2000), and Button and Lall (1999) advance the concept of airports as hub and spoke networks. Lian and Rønnevik's (2011) study of Norway find that passengers favor a region's large, main airport as opposed to smaller local airports due to the magnitude of services available. Kanafani and Abbas (1987) note that the success of smaller regional airports depends on finding locations that makes them independent from larger regional hub airports.…”

Section: Concepts and Theorymentioning

confidence: 99%

Up in the air: the role of airports for regional economic development

2014

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Abstract:Our research examines the role of airports in regional development. Specifically, we examine two things: (1) the factors associated with whether or not a metro will have an airport, and (2) the effect of airport activities on regional economic development.Based on multiple regression analysis for U.S. metros, our research generates four key findings. First, airports are more likely to be located in larger metros with higher shares of cultural workers and warmer winters. Second, airports add significantly to regional development measured as economic output per capita. Third, the effect of airports on regional development occurs through two channels -their capacity to move both people and cargo, with the former being somewhat more important.Fourth, the impact of airports on regional development varies with their size and scale.

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Section: Concepts and Theorymentioning

confidence: 99%

Up in the air: the role of airports for regional economic development

2014

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“…Recent literature [20,27,28] has shown that the attractiveness of airports mainly depends on their land-side accessibility. Therefore, we worked on the basis of the travel time from home and host countries to reach their related airports, knowing that this approach only serves as a proxy of the actual catchment areas.…”

Section: Methodsmentioning

confidence: 99%

Air connectivity and foreign direct investments: economic effects of the introduction of new routes

Bannò

Redondi

2014

Eur. Transp. Res. Rev.

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Purpose The key research question for this study was whether the spatial network structure offered by the global airline system contributes to the development of Italian inward Foreign Direct Investments (FDIs). We argue that the introduction of a new route, by reducing firm's transport costs and facilitating tacit and complex knowledge flow, should increase the likelihood of FDI exchange between newly connected regions. Methods We employed a comparison group design considering both small and medium enterprises and large companies at the municipality level.Results The results showed that FDIs increased overall by 33.7% in the two years after opening of the new routes while FDIs in the control group decreased by 16.6%. Similar results were obtained using different measures of FDI (i.e. the number of generated employees) and by weighting the routes by their frequencies. Conclusions Given the substantial benefits that urban areas can obtain from attracting multinational firms, our results provide new evidence of the contribution of transport infrastructures to local development. From a policymaker perspective, regional policies aimed at attracting FDIs must contextually promote the development of transport infrastructure and in particular international airports. Investments to improve air transport capacity, strategies to attract both traditional and low-cost airlines, providing legal authorization or financing ground transport are all critical aspects for the success of such policies.

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“…For example, in the United States, the Essential Air Service (EAS) is a government program that provides a minimum level of air transport service for small communities and connects them through carrier hubs to the national network (Grubesic and Matisziw, 2011). In Europe, the Public Service Obligation (PSO) ensures "minimum" levels of air service to remote areas by subsidizing non-commercial routes (Lian and Ronnevik, 2011). Santana (2009) compared the EAS and the PSO in order to find higher costs for airlines under the PSO program.…”

Section: Load Factormentioning

confidence: 99%

“…Grubesic and Matisziw (2011) pointed out that market coverage is often redundant and suggested alternative definitions of "community eligibility" that would increase programmatic efficiency and reduce federal spending on subsidies. Lian and Ronnevik (2011) noted the disadvantages of only providing subsidies for local residents and argued that regional non-residents must pay full fares, which, in turn, restrict the potential for incoming tourism.…”

Section: Load Factormentioning

confidence: 99%

“…As a result, the local government that owns the airport must prepare a special financial treatment in order to sustain the airway. However, such subsidies have been criticized in numerous studies, due to their inefficiency (Williams and Pagliari, 2004;Santana, 2009;Grubesic and Matisziw, 2011;Lian and Ronnevik, 2011;Matisziw 1 and Grubesic, 2012). Thus, introducing a gaming situation between an airline and an airport might improve such inefficiency through interactive decision-making processes.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Dynamically interdependent business model for airline–airport coexistence

Minato

Morimoto

2017

Journal of Air Transport Management

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Governments provide various forms of financial support for sustaining unprofitable regional airways, especially when such airways are essential to local livelihoods and economies. However, inefficient provision of subsidies has been subject to worldwide criticism. Therefore, this study examines the load factor guarantee, a dynamically interdependent business model for airline-airport coexistence where an airline and an airport agree on the load factor of a flight, after which either party compensates for any discrepancies between the actual and agreed-upon load factor. The model is calibrated by using 2003-2014 data regarding Noto Airport and All Nippon Airways, and system dynamics are employed to model the dynamic interactions between the two parties. The findings show that successful coexistence between an airline and an airport hinges on the integral management of annual negotiations regarding the target load factor and the monthly demand adjustment of subsidies. In addition, although a subsidy represents a temporary financial loss for an airport, it is an effective way of maintaining long-term, airline-airport coexistence. This model is applicable to unprofitable airways worldwide, and it contributes to their sustainable management.

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Airport competition – Regional airports losing ground to main airports

Cited by 103 publications

References 19 publications

Up in the air: the role of airports for regional economic development

Up in the air: the role of airports for regional economic development

Air connectivity and foreign direct investments: economic effects of the introduction of new routes

Dynamically interdependent business model for airline–airport coexistence

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