Traffic Distribution Rules in the Milan Airport System Effects and Policy Implications

This policy note aims to evaluate the effects of the traffic distribution rules introduced in the Milan airport system in 2000, whose objective was to steer traffic from Linate to Malpensa. However, Linate continued operating to the major European destinations, overlapping with the Malpensa network and limiting its performance. That, among other factors, led Alitalia to withdraw its hubbing activities from the airport in 2008. Limitations in Linate and high access times to Malpensa induced low-cost carriers to develop elsewhere. Policy makers should be aware that traffic distribution rules may have unintended consequences and can result in significant economic losses.