Conditions of direct and indirect competition
Direct competition
Analysing the degree of airport dependence on airlines (summarised by the Herfindahl-Hirschman-HHI concentration index, which reaches a value of 10,000 if an airport's offer is completely in a single carrier’s hands), it emerges that Malpensa is the European mid-sized airport (the second after Venice) with the lowest level of dependence on a single carrier.
Direct competition of major European airports based on the HH index
| Rank | Airport | Index of HH on ASK | Index of HH on seats | No. of companies |
|---|---|---|---|---|
| 1 | Venice | 514 | 627 | 53 |
| 2 | Milan Malpensa | 533 | 1,121 | 88 |
| 3 | Nice | 824 | 1,237 | 58 |
| 4 | Barcelona | 934 | 1,800 | 81 |
| 5 | Prague | 955 | 869 | 60 |
| 6 | Brussels | 1,016 | 1,233 | 67 |
| 7 | Geneva | 1,105 | 1,726 | 60 |
| 8 | Athens | 1,217 | 2,523 | 62 |
| 9 | Rome | 1,467 | 1,914 | 99 |
| 10 | Düsseldorf | 1,650 | 1,679 | 62 |
Source: ICCSAI Fact Book 2015
Direct competition is also measured by a different indicator, called entropy index (H), which is calculated (also in terms of ASK or seats) as if the airport offer share was equally divided among all carriers present. Therefore, low values of this index define situations where the traffic offer of a particular airport is highly concentrated. Using this index, Milan Malpensa Airport is the leading one in Europe in terms of lower dependence on individual airline carriers.
Direct competition of major European airports based on the H index
| Rank | Airport | Index of H on ASK | Index of H on seats |
|---|---|---|---|
| 1 | Milan Malpensa | 1.50 | 1.42 |
| 2 | Venice | 1.42 | 1.39 |
| 3 | Barcelona | 1.40 | 1.16 |
| 4 | Rome Fiumicino | 1.36 | 1.24 |
| 5 | Brussels | 1.33 | 1.33 |
| 6 | Prague | 1.32 | 1.35 |
| 7 | Nice | 1.32 | 1.21 |
| 8 | Athens | 1.28 | 1.05 |
| 9 | Geneva | 1.27 | 1.13 |
| 10 | London Heathrow | 1.22 | 1.15 |
Source: ICCSAI Fact Book 2015
Indirect competition
Indirect competition concerns the competition to get the same catchment area by air services of alternative and nearby airports.
Major European airports by indirect competition level
| Rank | Airport | Number of nearby airports | No. of routes in indirect competition | ASK competitors/ASK competed for |
|---|---|---|---|---|
| 1 | London Gatwick | 13 | 112 | 1.98 |
| 2 | London Heathrow | 13 | 68 | 1.50 |
| 3 | Milan Malpensa | 3 | 100 | 1.43 |
| 4 | Paris - Orly | 6 | 85 | 1.28 |
| 5 | Manchester | 5 | 85 | 0.99 |
| 6 | Düsseldorf | 7 | 88 | 0.87 |
| 7 | Paris CDG | 4 | 92 | 0.85 |
| 8 | Brussels | 7 | 82 | 0.76 |
| 9 | Zurich | 8 | 71 | 0.45 |
| 10 | Copenhagen | 4 | 16 | 0.29 |
Source: ICCSAI Fact Book 2015
Indirect competition level refers to each route offered by a specific airport for which there are alternative routes offered by other close airports or for near or coinciding destinations to the concerned route. The concept of "proximity", both for departing and destination airports, relates to locations within 100 km. Exposure of an airport to indirect competition is one of the elements that leads to questioning the view of an airport as a natural monopoly.
At European level, the area around London contains a large number of active airports, which are therefore in indirect competition. Almost all routes to Europe departing from Gatwick or Heathrow have indirect alternatives.
Indirect competition is also relevant in Lombardy area around Milan. From Malpensa, over 93% of European routes offered is subject to competition from other airports in the area, such as Linate and Orio al Serio. Malpensa Airport is in third place, after Gatwick and Heathrow airports, for indirect competition intensity. Ratio between the volume of alternative offer of locally competing airports (including Linate) and the offer of the airport on competing routes is significantly higher than one.