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A Review of the Airport-Low Cost Airline Relationship

The Review of Network Economics

Vol. 5, Issue 4 - December 2006, pp 413 - 420

Ian Humphreys
Loughborough University

Stephen Ison
Loughborough University

Graham Francis
Waikato University
E-mail: [email protected]

  This paper seeks to review the airport-airline relationship in the light of the growth in the low cost sector, identifying important issues that airport management should consider when negotiating with low cost airlines. Airports have responded to the potential opportunities that have arisen from the growth of low cost airlines. The low cost model has implications for the airline-airport relationship, forcing airports to negotiate contracts which significantly reduce aeronautical revenues whilst seeking to address this short fall by commercial revenues via increased passenger numbers. Airports have sometimes found it difficult to turn increased passenger volume into additional revenue.

Keywords: airports, low cost airlines, European Union, management

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