Low-Cost carriers, economies of flows and regional externalities

Abstract

The emergence of low-cost carriers, following air travel re-regulation in Europe, has major implications for individual firms and regional economies. Understanding regions as 'economies of flows', the paper explores, largely conceptually, how uneven, fluctuating, and fragmentary changes in air travel and connectivity, resulting from the activities of low-cost carriers, have had substantial impacts on flows of labour migrants, knowledge, business connectivity/investment, and mobile markets, especially tourism. The resulting modifications to institutions and regional externalities contribute to net changes in the transaction costs of individual firms, regional competitiveness, and the unfolding and increasingly interconnected map of uneven regional development in Europe. © 2009 Regional Studies Association.