Airport competition in Europe – more prevalent than often realised

Airport competition in Europe – more prevalent than often realised

Frontier’s report for ACI Europe on recent and future developments in airport competition in Europe, and how the regulatory and policy framework could support the industry’s recovery, has been published  

Our study assesses the level and working of competition between airports in the years before the Covid-19 pandemic forced air transport globally into near hibernation, the activities of airports during the Covid-19 pandemic, and examines future trends likely to affect the European aviation industry and assesses what these may mean for airport competition. 

Prior to the onset of the Covid-19 pandemic, airport competition was often intensive, with airports competing for airline services, connecting passengers, passengers in local areas and an active market for corporate control of airports reinforcing the incentives many airports had to compete. In recent years, as passengers return to flying and as business travel returns, signs of increasing competition are evident in the industry. 

Airports experienced a dramatic reduction in revenue with the onset of the Covid-19 pandemic. Based on a survey of European airports conducted for this study, airports across Europe pulled every lever to safeguard their businesses, in particular: over three-quarters of survey respondents reduced their cost base through reducing their investment programme and temporarily closing facilities, while half made staff redundant, and a quarter permanently revised their maintenance regimes. Almost all airports which responded to the survey made use of available government support and most raised additional external debt to finance their operations. 

 In the context of the data analysed and the future trends such as slower demand growth, compliance with environmental goals and enhanced negotiating position of airlines, airport regulation should be considered in the context of the reality of the market situation. The pressures should be carefully considered by regulators and policy makers to avoid unnecessary regulation, which could be costly and poorly targeted. 

Please click here to read the full report. 

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