How Can the Effects of the Introduction of a New Airline on a National Airline Network be Measured?<BR> A Time Series Approach for the Ryanair Case in Spain

This paper quantifies the Ryanair Effect on the Spanish airline network. It proposes new methodology based on an advanced time series approach that allows both the direct and indirect effects of the incorporation of a new airline to be measured and that can be easily extrapolated to other airport systems. The findings show the mean indirect effect on other airlines, in absolute value, is 8.6 per cent of the total airport traffic, peaking at a maximum of almost 29 per cent. Also, surprisingly, there is found to be a negative indirect effect at only four of the ten airports analysed. © 2012 LSE and the University of Bath