The issue of competitiveness has only become essential for Polish airports relatively recently, as a result of on-going political and economic transformation. The transformation enabled the shift from central government control to market regulation. Prior to exploration of competitiveness, we need to define the characteristics of air transport, and introduce the object of the research, namely the regional airport. Furthermore, we need to present the context of Polish regional airports development in relation to global air transport.

The essence of transport and its types

Transport itself is an activity, which aims to move something or someone from one place to another, over a distance, or to carry out a shipment. The term originates from the Latin word transportare (to carry, shift, move). In accordance with the meaning of the word, transport is a shift (movement) from a starting point to a destination point. Economically speaking, the activity is a payable service provision that results in the movement of people and cargo, as well as the creation of auxiliary services that are directly connected thereto.

Transport services constitute an intensifying factor for economic and social development in every nation. Transport development tends to diminish the distance between markets, and it makes way for an increase in production. Moreover, it activates areas around the infrastructure, which, as a result, helps to increase employment. Transport facilitates the processes of industrialisation and urbanisation. Apart from servicing material production sectors, it also serves nonproduction sectors, such as health protection and education. Furthermore, it works for the populace by fulfilling their individual transport needs. In addition, it activates both socio-economic and cultural life, and it facilitates tourism growth.

It is assumed that the development of transport is impossible without economic growth, and vice versa: economic growth is impossible without transport development. Therefore, a strong connection exists between the development of both, which bears the characteristics of mutual growth. Currently, it is not possible to substitute transport with any other activity. It is thus impossible to reach rapid economic growth without a well-developed transport infrastructure. It is a civilisational necessity. The development of transport infrastructure (both the modernisation of existing infrastructure and the building of new infrastructure) is a catalyst for change, which results in a positive domino effect. The development of transport should take place in connection with other sectoral programmes.

A condition necessary for competition to exist as an economic phenomenon is a free-market economy. Competition itself creates foundation for market processes. It also regulates the behaviour of all entities existing on the market. For that reason, the phenomenon of competition, as well as the notion of competitiveness cannot be a subject of research and analysis separately from the market, for they are closely connected with all factors, which create and model free-market structures. The way in which competitiveness is seen evolves constantly, especially when reality of economic, political or social life is taken into consideration. In this part of the monograph, the essential concept of companies’ competitiveness and its basic dimensions are presented. Moreover, the significance of companies’ competitiveness in the specific context of air transportation service sector is outlined.

The notion and essence of enterprises’ competitiveness

Concepts of enterprises’ competitiveness

The term ‘competitiveness’ is quite a complex notion. More and more attention is being paid to it in scientific research. However, it is neither understood nor interpreted unequivocally. One result of research into competitiveness is an array of totally different definitions of the notion in question.46 Competitiveness of a product, company, branch, sector, economy, or region is defined. The notion of ‘competitiveness’ can thus be used with respect to companies, sectors, regions, nations (countries), and also supranational organisations. In professional literature, an evolution of the notion can be seen, starting with a traditional concept, focusing mainly on the role of tangible assets as competitiveness-determining factors, to a more complex approach, where competitiveness is being determined with a wide variety of factors associated with macro-, meso- and micro- determinants of a company's environment. Therefore, despite the fact that there are many definitions of competitiveness, starting with traditional (cost-based) concepts to more developed (systemic) concepts, it can be assumed that competitiveness is about the ability to compete, in other words, to operate and survive in a competitive surrounding.48 Competitiveness of a company means that it is capable to compete, or to participate in a market game, relying on skills to compose factors of its competitiveness potential.

Interpersonal contacts are one of the most essential values of the modern world. Despite the development of a variety of different forms of communication, a strong need for personal contact still remains. Hence the need for movement and travel. Air transport, as one of the areas of the economy, has been experiencing rapid development for many years now. One of the reasons for that is that this type of transport enables us to reach any point on Earth relatively quickly, conveniently and safely. Nevertheless, aviation shall not progress without sufficient infrastructure and its growth is therefore strictly related to the appearance of new airports and the development of existing ones.

The development of airports must be considered from the point of view of different entities (e.g. central authorities, regional governments, entrepreneurs, beneficiaries and citizens.) Furthermore one must not forget different groups of influencing factors (legal, institutional and environmental ones). Also, to maintain a variety of different views, it is vital for us to look at regional, national and international levels of reference.

As a result of the great impact of global economic trends (such as globalisation, liberalisation and deregulation) on the air transport market, the growth of airports is extremely dynamic and difficult to forecast. New technologies emerge, economic conditions change rapidly, and the awareness of environmental protection is now greater than ever. All these changes are taking place in times of great competition, as well as within certain financial constraints. Therefore, exploration of competitiveness is vital for all: the airport's owners and its management team. Competitiveness, at the same time, constitutes an interesting field of study and is a traditional area of activity of the world's greatest business consultancies.

The study of competitiveness is moreover vitally important for Polish regional airports, which, for historical reasons, have only started to develop in the last 20 years, and are currently beginning to strengthen their position on the aviation services market. It is crucial for regional airports to be able to face new challenges. Along with new opportunities, risk factors must also be taken into account. Poland's accession to the Organization for Economic Co-operation and Development (OECD), the European Union and the Schengen Area, as well as other processes within the recent years, have had a great impact on the Polish aviation transport sector, which became an integral part of the European system.

Over the past years, the Polish civil aviation sector – regional airports in particular – has been developing intensively. As a consequence of the political transformation of the 1990s and Poland's accession to the European Union, there were strong institutional and legal changes. Socio-economic conditions, in which both old and new Polish airports operate, have changed significantly as well. Transformation that has occurred in the last two decades in Poland and in Europe contributed to the increased competition in the air transport market.

The phenomenon of competition is generally seen as a positive economic category influencing the growth of business efficiency, and favouring the restoration of equilibrium in the economy. However, in times of crisis, intensification of competitiveness can make it difficult for entities, operating in the demanding and difficult air services market, to function and generate income. It may even threaten their existence. Therefore, management boards of companies are looking for reliable and objective data – information and measures of competitiveness – to make accurate business decisions.

In the case of airports (compared with enterprises in the classical meaning of the word), the situation is far more complex, because a modern airport is a very sophisticated economic organism, the functioning of which is not so easy to evaluate. The progressive processes of globalization and liberalization, as well as the associated internationalization of air transport, contribute to the enhancement of competitiveness in this sector. These processes also apply to Polish airports, which had been transformed into objects of a new type. Their main and essential purpose is to increase the efficiency of management and to improve competitiveness. The problem of the development of air transport, and the associated issue of the competitive position of the airport, is relatively well presented in foreign literature. However, in Polish literature it has not been shown in enough depth. This monograph has designated and specified determinants of competitiveness of Polish regional airports, which are necessary for the strategic management of the airports. The field of strategic competitiveness was shown by multilateral relationships and dependencies between a regional airport and various external determinants, and by relating them to actions by the managers of the regional airport.

In the ever more competitive world of air transportation, maintaining a competitive position of individual airports in the air transport market is increasing in importance. Ensuring the current and future competitive strength is a serious challenge to all airports, but especially to regional airports, because their position – in comparison with the so-called big ports (hubs) – is not as stable and unthreatened. This chapter discusses the key elements for the analysis and evaluation of airport competitiveness. An overview of methods and tools used in competitiveness evaluation is shown, leading to the selection of features, which have significant impact on a competitive position of an airport.

Fundamental aspects of airport competitiveness

The dynamic development of the market for air transport services, coupled with the processes of liberalization and deregulation, have led to increased competition between individual airports.86 It turns out that the marketing approach, which assumes airport's monopoly on the service, is out-dated. In recent years, airport areas in many regions have been significantly expanded. This has been largely influenced by the emergence of the so-called low-cost airlines. Passengers, who can purchase an airline ticket at a favourable price, are willing to devote more time to getting to the airport, which offers them that opportunity. The development of transport infrastructure also has a major impact on airport competitiveness. Airports have to compete against each other for customers.

The growth in air traffic volume requires airports to increase their infrastructure spending. They need to improve the efficiency of runways, the assignment of slots and ground operations. This is associated with the need to work with new and still very expensive technological solutions. The processes of deregulation and liberalization of the airports, which have been taking place around the world for the last several years, led to airports becoming prone to fierce competition. On the other hand, the quality of airport service is affected by separate regulations (e.g. such concerning safety or protection of the environment). Until a few decades ago, most airports were state owned. The gradual privatization carried out today in many countries is causing an increase in shareholders’ expectations for profit and quality management.

The success or failure of such enterprise depends on determinants, which should be examined as an impact of various external and internal factors. The multiplicity of these elements, as well as diverse strength of their impact, cause the study of determinants of the development of regional airport and their effect on its competitiveness – possible success or failure – to be a very complex process.

In the first section of this chapter, we will present the external determinants affecting the activity of Polish airports. The (external) environment of an airport is an outside source of its competitiveness and a source of both possibilities (opportunities) and threats (restrictions) to the growth of the port. The basis for the development strategy, that is strategic port competitiveness, is to identify the most important factors in the different layers of the environment i.e. macro-, meso- and micro-environment. The operation and competition of the airport is shaped by strong interactions, which occur between various elements of the environment (macro-, meso- and micro-).

At the micro-environment level, the regional airport is impacted by factors related to the fact that the facility operates in specific global conditions, although it exists in a particular region and country. It is also significantly influenced by the general socio-demographic situation. Among the most significant determinants at meso-environment level are factors related to the issue of attractiveness of cities and regions (the strength of the region and its economic and social potential, etc.). Micro-level is defined as the so-called direct (competitive) environment of the regional airport, therefore it includes sets of factors relating to the relevant geographic market, the airport's location or its place in the intermodal freight transport system. It is particularly important to look at the range of impact (catchment area) of Polish regional airports against adjacent major ports, especially in Germany.

The ability to meet challenges resulting from all spheres of the external environment essentially influences the development of the competitive position of the regional airport. What matters is whether its attitude will be passive or active, whether the opportunities will be seized and crisis situations will be eliminated. Airport Management Board's skills to take firm actions are also highly significant. Therefore, in the second section of the chapter, the internal determinants of regional airport competitiveness will be discussed.

In this chapter of the monograph, the authors distinguish the most important factors pertaining to the competitiveness of Polish regional airports (in terms of passenger transport). A devised econometric model is presented, which enables assessment of the significance and the impact of individual features taken from the already established dataset (potential regressors) on shaping the competitive position of individual Polish regional airports.

Based on the availability of feature measurements, the empirical material consisted of data from 11 Polish regional airports in the years 2007–2010 (the present study includes only those airports, which were actually operating in the analysed period). The above-mentioned data is panel-type data, and simultaneously comprises the features applicable to cross-sectional data and time-series data. This is due to the fact that they have been established as a result of observation of identical objects in subsequent time periods. In this particular case, 11 objects referred to 11 airports (n = 11), whose features were subjected to observation in four subsequent years (T = 4). The total count of nT sample was 44 object-periods. The advantage of panel data is that it provides a greater amount of information about these objects. Panel data enables simultaneous consideration of the diversity of studied objects, and observation of their evolution in time.

One of the measures of the share of a given airport in the total share of passenger transport is the percentage of the number of passengers served by the given airport to the total number of passengers served by all airports considered within the analysed group. The random variable, which describes market shares, or fractions (designated respectively on the basis of analysis), assumes values in the range of <0, 1>. We should add that the sum of values assumed by this feature for individual units, observed in the same period, equals 1.

Considering the above, the model applied to the relationship between dependent variable, which describes the summed fractions and the explanatory variables, needs to include the specific character of the former variable. In the case of cross-sectional data, one of the possible applications is the socalled multinomial fractional logit, with parameters estimated as quasi-MLE (quasi-Maximum Likelihood Estimator).