Case study Does market exit of a network airline affect airline prices and frequencies on tourist routes? Xavier Fageda a , Juan Luis Jim  enez b, * , Jordi Perdiguero c , Kevin Marrero b a University of Barcelona, Departament d’Economia Aplicada, Av. Diagonal 690, 08034 Barcelona, Spain b University of Las Palmas de Gran Canaria, Facultad de Economía, Empresa y Turismo, Campus de Tafira, 35017 Las Palmas de Gran Canaria, Spain c Universitat Aut onoma de Barcelona, Departament d’Economia Aplicada Research Group of “Economia Aplicada” (GEAP), Spain highlights  We study the effects of the bankruptcy of a Spanish network airline; Spanair.  We use panel data for Spanish routes with a high proportion of tourist destinations.  We analyze the replacement of services of a network by low-cost airlines.  We find a reduction in air fares but not a reduction in flight frequency.  We provide evidence about the positive impact of low-cost airlines on tourism. article info Article history: Received 13 September 2016 Received in revised form 14 January 2017 Accepted 16 March 2017 Keywords: Low-cost airlines Tourism Prices Flight frequencies abstract This paper examines the influence of network airline bankruptcy (and consequently its market exit) on prices and route frequencies. Specifically, the 2011 case of Spanair is analyzed, using Spanish route data for the period 2006e2013. The study finds that the Spanair bankruptcy led to a reduction in prices on those routes where its services were replaced by low-cost airlines. On the other hand, there was no evidence of any clear reduction in flight frequencies. Given that tourist passengers are particularly sensitive to prices, this paper provide evidence about the positive impact of low-cost airlines on tourism. © 2017 Elsevier Ltd. All rights reserved. 1. Introduction A number of previous studies have shown a strong relationship between transport infrastructure and tourism (Abeyratne, 1993; Chew, 1987; Della Corte, Sciarelli, Cascella, & Del Gaudio, 2013; Khadaroo & Seetanah, 2007, 2008; Martin & Witt, 1988). Indeed, transportation acts as one of the main determinants of tourist destination as it improves accessibility to a particular location. A large proportion of tourists arrive at their final destination by plane so it is not surprising to find that air services have a high impact on the number of tourist arrivals (Albalate & Fageda, 2016; Bieger & Wittmer, 2006; Dobruszkes & Mondou, 2013). Thus, entries and exists in the airline market may have signifi- cant implications for tourism. Here it is important to mention that the air transport market is dominated by two different types of airlines. First, network carriers exploit transfer traffic through co- ordinated banks of arrivals and departures at their hub airports. These network airlines are usually former flag carriers and are frequently a part of international alliances. By adopting this strat- egy they are able to reduce their costs through the exploitation of density economies, and can offer greater flight frequency, which are highly valued by business and connecting passengers (Fageda, 2014). Second, low-cost airlines operate point-to-point routes. They may be independent airlines or subsidiaries of network airlines but they are usually not integrated in international alliances. Low-cost airlines have been able to reduce their expenditure to compete with network airlines on short-haul routes (Francis, Dennis, Ison, & * Corresponding author. E-mail addresses: xfageda@ub.edu (X. Fageda), juanluis.jimenez@ulpgc.es (J.L. Jim enez), jordi.perdiguero@uab.cat (J. Perdiguero), kevin.marrero.garcia@ gmail.com (K. Marrero). Contents lists available at ScienceDirect Tourism Management journal homepage: www.elsevier.com/locate/tourman http://dx.doi.org/10.1016/j.tourman.2017.03.016 0261-5177/© 2017 Elsevier Ltd. All rights reserved. Tourism Management 61 (2017) 465e471