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Airport–airline cooperation under commercial revenue sharing agreements: A network approach

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  • Saraswati, Batari
  • Hanaoka, Shinya

Abstract

This study analyzes airport–airline cooperation where an airport offers to share a proportion of its commercial revenue with airlines in exchange for a fixed payment. We observe the revenue share allocation that maximizes airport profit, subject to airline acceptance, and examine the effects of revenue sharing on downstream competition and social welfare. Methodologically, we employ multi-airport multi-airline non-cooperative games with a network model and find that an airport prefers to share revenue with its dominant airline in order to gain the optimal benefit.

Suggested Citation

  • Saraswati, Batari & Hanaoka, Shinya, 2014. "Airport–airline cooperation under commercial revenue sharing agreements: A network approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 17-33.
    • Handle: RePEc:eee:transe:v:70:y:2014:i:c:p:17-33
    DOI: 10.1016/j.tre.2014.06.013
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    Cited by:

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    2. Camelia Monica Gheorghe & Dorin Ivascu & Mihai Sebea & Cristina Stoenescu, 2017. "Exploring The Role Of Alliances, Agreements And Partnerships In The Airline Industry; The Case Of Apg Network Within The Romanian Market," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 161-168, August.
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    4. Xu, Fangzhou & Hanaoka, Shinya & Onishi, Masamitsu, 2019. "Multi-airport privatization in a Japanese region with trip-chain formation," Journal of Air Transport Management, Elsevier, vol. 80(C), pages 1-1.
    5. Tu, Ningwen & Li, Zhi-Chun & Fu, Xiaowen & Lei, Zheng, 2020. "Airline network competition in inter-continental market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    6. Mehmet Onur Olgun, 2022. "Collaborative airline revenue sharing game with grey demand data," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 30(3), pages 861-882, September.
    7. Liu, Jiaguo & Wang, Junjin, 2019. "Carrier alliance incentive analysis and coordination in a maritime transport chain based on service competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 333-355.
    8. Kumar, Patanjal & Baraiya, Rajendra & Das, Debashree & Jakhar, Suresh Kumar & Xu, Lei & Mangla, Sachin Kumar, 2021. "Social responsibility and cost-learning in dyadic supply chain coordination," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    9. Gong, Daqing & Ren, Long & Liu, Shifeng & Yan, Xiaojie, 2022. "Compensation and coordination mechanisms on China's railway public transportation service," Transport Policy, Elsevier, vol. 115(C), pages 101-112.
    10. Nerja, A. & Sánchez, M., 2021. "The effects of concession revenue sharing contracts in airport competition," Economics of Transportation, Elsevier, vol. 28(C).
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    15. Dixit, Aasheesh & Choi, Tsan-Ming & Kumar, Patanjal & Jakhar, Suresh K., 2024. "Roles of reciprocity and fairness concerns in airline-airport systems with environmental considerations," European Journal of Operational Research, Elsevier, vol. 312(3), pages 1011-1023.
    16. Tsunoda, Yushi, 2023. "Airport concession revenue sharing and entry deterrence," Economics of Transportation, Elsevier, vol. 33(C).

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