Determinants of air cargo traffic in Europe: Intercontinental flights, competition and airlines’ business model

Abstract

In this paper, we examine the determinants of air cargo traffic in European airports from 2002 to 2019 by estimating a two-way fixed effects model. We focus on the correlation between air cargo and key attributes of passenger services at airports, including the number of non-stop intercontinental destinations, the share of network airlines, and the intensity of competition. We consider different samples with a special attention to mid-sized airports located in relatively big cities. We find that the availability of direct flights to North America, East Asia, and the Middle East has a positive impact on air cargo. A higher percentage of flights offered by network airlines leads to more air cargo as well. However, we also find that competition stimulates air cargo, meaning that medium-sized airports can benefit from a greater presence of non-European network airlines.