Originally Posted by
runway30
It is economies of density. The marginal cost of an additional passenger at the larger airports is lower and airlines can negotiate a better deal and have a bigger market to sell into. There is no reason, unless all other markets are saturated or a network airline is looking for network growth, for an airline to go to a small airport unless they are offered a similar deal. The only way a small airport can offer that cheaper deal is if some other party pays a subsidy.
That was the Peel MO. Cheap and cheerful as long as you put x number of passengers through our terminal so we can generate revenue through ancillaries. Won them a court case against Bmibaby which provided a rare public example of the commercial terms on offer, got FlyBe in at a cost to themselves rumoured to be £1million per year. Only really worked at LPL because they have a bigger population to draw from. It’s why I can’t understand where the high charges rumours come from but it seems to be accepted that this was the case. Probably only half a story, airlines wanting the freebies but not putting the volume through would be my guess.