The evolution of the European aviation network, 1990-1998

The deregulation of US aviation has led to drastic changes in route structures and to widespread adoption of the hub-and-spoke system. This paper investigates whether deregulation in the European Union has led to a similar pattern. The study uses time schedule data for all airports in the European Union during the period 1990-1998 and analyses both intra-European and intercontinental scheduled services. At the airport level. we find no evidence for the concentration of intra-European traffic on a small number of hubs. Air traffic to intercontinental destinations, however, is increasingly concentrated on hub airports. At the route level, a type of hub-and-spoke structure has developed. Here, the national carriers remain the dominant players. The market share of low-cost carriers has increased but is still very small. This paper concludes that a number of imperfections on the supply side of the market constrain the effect of European deregulation on competition. (C) 2001 Elsevier Science Ltd. All rights reserved.