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Ryanair’s Impact on Airline Market Share from the London Area Airports - a Time Series Analysis

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  • David Pitfield

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    Abstract

    Ryanair tends to operate to destinations from its UK bases that are not the main airports in the country being served and in this it differs from many other European low cost carriers. For example, it flies from London Stansted (STN) to Venice Treviso (TSF), whereas the competition flies from other London area airports to Venice Marco Polo (VCE). So although direct competition is not provided in the way that rival services operate between identical pairs of airports, indirect competition is provided. This raises the question, when Ryanair commence services, what is the impact on the market share of the incumbent airlines at these other airports? This can be shown by examining UK Civil Aviation Authority (CAA) data on scheduled passengers carried, along with OAG data on flight frequency, airline and aircraft type on a number of selected routes. The impact on market share can be shown and the conclusion suggested that total traffic is stimulated on these sectors so that incumbent's traffic might fall, be constant or even increase, whilst their share, and probably their yield, falls, as Ryanair exploits latent demand. These findings echo previous work, for example, Barrett (2000). These conclusions are really generated hypotheses and these can be tested more completely by a time series analysis on monthly passenger data from 1991- 2003.

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    Bibliographic Info

    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p16.

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    Date of creation: Aug 2005
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    Handle: RePEc:wiw:wiwrsa:ersa05p16

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    1. Barrett, Sean D, 2000. "Airport competition in the deregulated European aviation market," Journal of Air Transport Management, Elsevier, vol. 6(1), pages 13-27.
    2. Barrett, Sean D., 2004. "How do the demands for airport services differ between full-service carriers and low-cost carriers?," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 33-39.
    3. Tretheway, Michael W, 2004. "Distortions of airline revenues: why the network airline business model is broken," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 3-14.
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