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The benefits of codesharing and antitrust immunity for international passengers, with an application to the Star alliance

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  • Brueckner, Jan K.

Abstract

This paper summarizes and extends the empirical findings of previous research by the author, which analyzed the effect of airline cooperation on the level of interline fares paid by international passengers. The analysis focuses on three measures of cooperation: alliance membership, codesharing, and antitrust immunity. The results show that, together, these three forms of cooperation lead to a substantial 27 percent reduction in interline fares. The paper then computes the aggregate benefits from antitrust immunity and codesharing for the Star Alliance's interline passengers. The immunity enjoyed by the Star partners generated an aggregate benefit of about $80 million per year for interline passengers in 1999. Codesharing among Star partners yielded a further annual benefit of around $20 million. Moreover, if cooperation within the Star Alliance had expanded through an extension of antitrust immunity to those 1999 partners who did not enjoy it, then $20 million of additional benefits would have been generated.

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  • Brueckner, Jan K., 2003. "The benefits of codesharing and antitrust immunity for international passengers, with an application to the Star alliance," Journal of Air Transport Management, Elsevier, vol. 9(2), pages 83-89.
    • Handle: RePEc:eee:jaitra:v:9:y:2003:i:2:p:83-89
    DOI: 10.1016/S0969-6997(02)00045-5
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    References listed on IDEAS

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    Cited by:

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    3. Andrea Mantovani & Ornella Tarola, 2007. "Did the Entry of Low Cost Companies Foster the Growth of Strategic Alliances in the Airline Industry?," Rivista di Politica Economica, SIPI Spa, vol. 97(1), pages 189-220, January-F.
    4. Gayle, Philip G. & Thomas, Tyson, 2016. "Assessing firm behavior in carve-out markets: Evidence on the impact of carve-out policy," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 178-194.
    5. Wen, Yuh-Horng & Hsu, Chaug-Ing, 2006. "Interactive multiobjective programming in airline network design for international airline code-share alliance," European Journal of Operational Research, Elsevier, vol. 174(1), pages 404-426, October.
    6. Ito, Harumi & Lee, Darin, 2005. "Domestic codesharing practices in the US airline industry," Journal of Air Transport Management, Elsevier, vol. 11(2), pages 89-97.
    7. Nesreen Barakat, 2012. "Arab Passengers’ Airlines Framework and Performance: Jordan Case," Working Papers 727, Economic Research Forum, revised 2012.
    8. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2023. "Price discrimination through hidden city options? A data-driven study on the extent and evolution of skiplaggability in the global aviation system," Journal of Air Transport Management, Elsevier, vol. 108(C).

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