Measuring the effect of low-cost carriers on regional airports' commercial revenue

This paper measures the effect of low-cost carriers (LCCs) on British regional airports' commercial revenue using panel data analysis. The evidence shows that although LCCs have significant impact on airports' commercial revenue, their contribution is smaller compared to other carriers. The empirical results indicate that holding other variables constant, on average, each additional LCC passenger boosts airport commercial revenue by £2.87, while each additional other carrier passenger raises commercial revenue by £5.59. These results are relatively stable across different models. The findings have important policy implications for aviation strategy at the regional level and beyond.