Conditions of direct and indirect competition

Direct competition
Analysing the degree of airport dependence on airlines (summarized 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. This differing, for example, from large continental airports such as Frankfurt, where about 54% of the offerings are by Lufthansa, or other Italian airports such as Bergamo, where Ryanair controls over 80% of the offerings.

Direct competition of the major European airports based on the HH index

Rank	Airport	Index of HH on ASK	Index of HH on seats	No. of companies	ASK share of the top 5 carriers (%)
1	Venice	476	634	56	37.7
2	Milan Malpensa	539	1,206	80	42.0
3	Manchester	636	676	53	46.5
4	Prague	758	704	60	50.3
5	Nice	828	1,210	55	54.6
6	Barcelona	945	1,811	81	49.1
7	Brussels	959	1,187	66	54.2
8	Geneva	1,166	1,786	63	57.7
9	Athens	1,216	2,393	64	52.8
10	Rome	1,314	1,819	98	51.0

Source: ICCSAI Fact Book 2016

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. By this index, Milan Malpensa Airport is the leading one in Europe in terms of lower dependence on individual airline carriers.

Direct competition of the 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	1.39
2	Venice	1.45	1.40
3	Barcelona	1.39	1.16
4	Rome Fiumicino	1.38	1.22
4	Prague	1.38	1.40
6	Brussels	1.34	1.33
7	Nice	1.32	1.22
8	Athens	1.27	1.04
9	Geneva	1.26	1.12
10	London Heathrow	1.23	1.15

Source: ICCSAI Fact Book 2016

Indirect competition
Indirect competition is 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	119	1.92
2	London Heathrow	13	73	1.57
3	Milan Malpensa	3	76	1.52
4	Paris - Orly	6	95	1.44
5	Manchester	5	83	0.96
6	Dusseldorf	7	87	0.94
7	Paris CDG	4	93	0.84
8	Brussels	7	78	0.70
9	Zurich	8	70	0.44
10	Copenhagen	4	19	0.26

Source: ICCSAI Fact Book 2016

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 the 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. The 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.