Low cost carriers, economies of flows and regional externalities

Abstract

The emergence of low cost carriers, following air travel reregulation in Europe, has significant implications for individual firms and regions understood as 'economies of flows'. This 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 mediation of regional externalities and institutions result in changes in the transaction costs of individual firms, regional performance, and the unfolding and increasingly interconnected map of uneven regional development in Europe.