Air Transport Market Deregulation and its Effect on the Short-Sea Shipping of the Greek Domestic Market

It has almost been a decade since the deregulation of the Greek air transport market.

During these years a number of new airlines entered the market with various degrees

of success, attempting to participate and compete in this growing market. However

Greece's morphology, which includes many island destinations and are a popular

tourist destination, creates a competitive environment between air travel and short-sea

shipping. It should be also mentioned that the deregulation of the greek short-sea

shipping market has recently (from November 2002) been implemented, a fact which

will increase the competition between the two different means of transport. This

article attempts to discover the results and effects of this deregulation in the Greek

transport sector from the scope of both air transport and short-sea shipping. The

conclusions are based on the evaluation of data as they were recorded in the course of

the past decade.

Keywords

Competition, Domestic Air Transport, Domestic Short Sea Shipping, Deregulation,

Greek Air Market, Greek Insular Market.

King of Greece & family (LOC)

March 25 - Greece Independence Day

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1. Introduction

The Greek insular market represents an area of special interest, since it is the market

where two different modes of transport (sea and air) compete in offering transport

services to and from the islands. With the application of the EU transportation

policies, which promote deregulation, a new market environment is created offering

opportunities for new operators to enter the market.

Greece has over 2000 islands, 200 of which are populated. The transport needs of

these islands for scheduled transport services are served by a 24 airports and more

than 90 seaports. Questions are therefore being raised as to the coverage offered to the

market, the extend of competition between both transport means and the benefits

which arise for passengers and operators. Furthermore the need to connect smaller

islands with the mainland for social and financial reasons,