Do dedicated low-cost passenger terminals create competitive advantages for airports?

Traditionally designed for network carrier operations, airports are increasingly diversifying their services with new facilities being developed, specifically, to attract and accommodate low-cost carriers. In order to reflect the changing environment, some airports have built low-cost terminal facilities (or refurbished existing ones) for low-cost carriers. Applying a resource-based view, namely the VRIO framework (VRIO is an acronym for Value, Rarity, Imitability and Organisation), this paper analyses the potential of dedicated low-cost terminals in affecting the competitive positioning of airports. The research investigates for selected airports the potential benefits associated with the development of low cost passenger terminals and the factors which may help turning these benefits into a (sustainable) comparative advantage. It is argued that low-cost terminals offer a temporary competitive advantage which has so far not often been exploited.