Spatial evolution of airport traffic and air transport liberalisation: the case of Greece Andreas Papatheodorou a, * , Pavlos Arvanitis b a Department of Business Administration, University of Aegean, 8 Michalon Street, 82100 Chios, Greece b ETEM, University of Aegean, 54 M. Livanou Street, 82100 Chios, Greece article info Keywords: Airport traffic Liberalisation Spatial concentration Tourism development Greece Low-cost carriers abstract This paper explores the evolution of airport passenger traffic in Greece over the period 1978–2006. The country is a member of the European Common Aviation Area, but despite air transport liberalisation, spa- tial concentration of traffic and asymmetry remain high and have not decreased significantly over time. Greece is still short of traffic generated by low-cost carriers especially outside the main metropolitan air- ports. The paper argues that further dispersion of traffic could be possible primarily in the mainland if low-cost carriers decide to dynamically enter the Greek market. Potential benefits for regional and tour- ism development should induce policy makers to work towards this direction. Ó 2008 Elsevier Ltd. All rights reserved. 1. Introduction In 2007, the European air transport industry celebrated 10 years since the full implementation of the Third Liberalisation Package. This resulted in the creation of the European Common Aviation Area (ECAA) among the European Union member states plus Nor- way, Iceland, Switzerland and Liechtenstein in 1997. A further expansion of ECAA is also scheduled by 2010 to include neighbour- ing states in the Mediterranean Region and the Balkans. Within ECAA, airlines enjoy free market entry and exit, free pricing and capacity setting, and may use rights regarding all freedoms of the air (including cabotage) in their business operations and schedules planning (Papatheodorou and Lei, 2006). Still, this advancement in market liberalisation did not result in intense competition among carriers on the existing routes; accord- ing to Dobruszkes (2006), 87% of city-pairs operated either as monopoly or duopoly services in the ECAA in 2004. On the other hand, it seems that competition has mainly led to the establish- ment of new routes by low-cost carriers (LCCs). In fact, and although the origins of their business model can be traced back to the early 1970s when Southwest started operations in the USA, the growth of LCC in Europe has been meteoric in the last 15 years. Although bankruptcies are not unusual (e.g. Debonair, Duo Airways, Air Polonia), companies such as Ryanair, easyJet, and Air Berlin have managed to consolidate their position in the European airline industry by offering services to a multitude of destinations across the Continent. By looking at the map of destinations served by LCC in Europe, it is easy to trace a pattern of North-West to South-West services (e.g. Britain to France, Spain and Italy) plus an increasingly impor- tant pattern of North-West to North-East flights (e.g. Britain to Germany and Poland). Services to Balkan states and Greece are lim- ited so far. Bulgaria and Romania have only recently joined the ECAA, but Greece has fully implemented the Third Liberalisation Package since 1998. It is true that Greek destinations lie beyond the typical 2.5 h flight range (used as a benchmark by most LCCs) from Britain; nonetheless, this is not the case for flights originating from Germany, Italy or Poland. Over the last few years, Greece has seen some development of LCC services, which now cover a num- ber of destinations as shown in Table 1. Nonetheless, the great majority of these services are related to seasonal summer traffic similarly to charter carriers, which provide extensive services be- tween Northern Europe and a multitude of Greek islands (e.g. Crete, Rhodes, Mykonos and Zakynthos) and some mainland desti- nations (e.g. Kavala). In fact, LCCs seem to provide a year round ser- vice only to major metropolitan Greek cities, such as Athens (the capital) and Thessaloniki (the second largest city of the country sit- uated in the north). Small and remote destinations in Greece have not so far benefited from the LCC revolution in Europe. Although Greece is a major tourism destination in Europe – recording more than 17.5 million tourist arrivals (National Statistical Service of Greece, 2008), which accounted for $14.51 billion in receipts in 2007 (United Nations World Tourism Organization, 2008) – its tourism flows are highly concentrated. The development of LCC services across the country may help Greece develop tourism on a more diverse basis beyond the classical image of a ‘‘sea-and-sun” destination. Having the above in mind, this paper explores the spatial evolution of airport traffic in Greece by focusing on the implica- tions of air transport liberalisation. Section 2 provides a theoretical framework by studying territorial rivalry among European airports, while Section 3 highlights the profile of Greek airports. Section 4 0966-6923/$ - see front matter Ó 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.jtrangeo.2008.08.004 * Corresponding author. Tel.: +30 6977 64 68 36; fax: +30 2106 43 69 31. E-mail addresses: a.papatheodorou@aegean.gr, academia@trioptron.org (A. Pa- patheodorou), p.arvanitis@chios.aegean.gr (P. Arvanitis). Journal of Transport Geography 17 (2009) 402–412 Contents lists available at ScienceDirect Journal of Transport Geography journal homepage: www.elsevier.com/locate/jtrangeo