Low cost airlines, secondary airports and State aid: an economic assessment of the Ryanair/ Charleroi airport agreement

• Type: Article in International Scientific Journal
• Date: 2006

Authors

Cristina Barbot (Author) FEP

Journal

Title: Journal of Air Transport Management

Vol. 12 No. 4

Pages: 187-203

ISSN: 0969-6997

Publisher: Elsevier

Indexing

ISI Web of Science

Other information

DOI: 10.1016/j.jairtraman.2006.04.001

Abstract (EN): This paper builds a vertical differentiation model to analyse the effects of subsidies, or lower aeronautical charges, for secondary airports on competition between low cost and full scheduled carriers. The Ryanair¿Charleroi Airport agreement in Europe is used as an example and as a basis for the model. The main findings are that subsidization or lower airport charges benefit consumers and negatively affect incumbent airlines. However, they may be more affected by competition than by the subsidy. An empirical analysis provides a few insights on the influence of dominating airports in Ryanair fares. We conclude that this airline sets lower fares when flights depart from or arrive at dominated airports.

Language: Portuguese

Type (Professor's evaluation): Scientific