DEVI Webinar – Davide Scotti (University of Bergamo, Italy)

Date - Heure / Date - Hour
Date(s) - 25/03/2021
10h30 - 11h30

The impact of LCCs’ growth on the air networks of European NCs


We study how European network carriers’ (NCs’) air networks evolved in response to competitive inroads by low-cost carriers (LCCs) over the last two decades. As LCCs added routes and increased their market shares, NCs reacted by reconfiguring their networks. Specifically, we find that the NCs adopted the following two network strategies: (i) Increased the centralization of their networks, reinforcing their “fortress hubs”, and (ii) increased the hub-and-spoke nature of their network structures, eliminating point-to-point connections that do not flow through these hubs. Although NCs engaged in other strategies during this time period to differentiate their services from LCCs, such as increasing business class seating, we do not find that these differentiation strategies were directly attributable to LCC market penetration. Given the importance of the NCs maintaining worldwide connectivity, our findings inform policymakers as to potential consequences from continued expansion by LCCs in Europe.

This is joint work with Professor Martin Dresner (University of Maryland, USA).

The presentation will be given in English.