ABSTRACT
Since liberalization of the European aviation market, completed in 1997, the nature of air travel in Europe has changed dramatically. One of the most important outcomes is the emergence of low-cost carriers (LCCs). These LCCs have driven down the cost of air travel and forced a fundamental restructuring of many existing full-service airlines as well as charter carriers (Njegovan, 2006; Papatheodorou and Lei, 2006). Intensified price competition between airlines has stimulated demand for short-haul air travel, leading to phenomenal growth of traffic at regional airports. Increased traffic appears to have had a significant impact on the financial performance of the airport industry because profitability is to a large extent dependent on the volume of traffic (Graham, 2003).
