Economic impacts on destination air traffic following a flag carrier's market exit: a case study for Budapest

• Main Authors: Adam Torok, Florian Heinitz
• Format: Article
• Language: English
• Published: Vilnius Gediminas Technical University 2013-12-01
• Series: Aviation
• Subjects: post-liberalised airline market; flag carrier; low-cost carrier; market exit; incoming tourism
• Online Access: http://journals.vgtu.lt/index.php/Aviation/article/view/3561

After 66 years of existence, the Hungarian state carrier MALEV had to cease operations in 2012 because of its financial situation. The sudden market exit affected more than half of the traffic at Budapest's Liszt Ferenc Airport (BUD). This paper aims to investigate the market reactions, taking particular note of the role of low-cost carriers (LCC). The examination of a legacy carrier's situation contending with dynamic low-cost airlines establishes the basis for the case of Budapest. Originating with the hypothesis that the shift from a flag carrier to an LCC dominated market has effects on incoming tourism, this paper also studies the secondary effects of this situation.