The effect of airline dominance on airport performance: Empirical evidence from medium-sized European airports

The air transport industry is a competitive and volatile market, creating a challenging operating environment for both airports and airlines. While airline market structures are rapidly changing, airports are in a continuous need to improve their technical efficiency. Therefore, in this paper, we examine the effect of airline dominance on airport technical efficiency. Previous research is contributed by examining this effect on a balanced panel dataset of medium-sized European airports while considering the effect of the macro-environment, ownership, belonging to an airport group, and the network structure of the dominant carrier (LCC or FSC). Results demonstrate a significant positive relationship between airline dominance and the airport's technical efficiency. The paper has an important policy implication as it highlights the importance of taking into account efficiency effects at airports when evaluating airline consolidation cases.