Asymmetric Regulation and Airport Dominance in International Aviation: Evidence from the London-new York Market
AbstractInternational airline markets have the rather unusual feature of partial deregulation with asymmetric regulatory constraints: Some carriers face entry restrictions different from others for a given route. Like domestic air travel, international travel also features hubs, where a single carrier may dominate a given airport. This article examines the effects of asymmetric regulation and airport dominance on airlines' fares in the London-New York market, a market uniquely suited for identifying the effects of both of these issues. Comparison data from the symmetrically regulated Frankfurt-New York and Paris-New York markets enable a difference-in-differences identification strategy. Regulatory restrictions are found to decrease an affected carrier's fares, whereas airport dominance increases a dominant airline's fares.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 74 (2007)
Issue (Month): 2 (October)
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
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- Volodymyr Bilotkach & Yuriy Gorodnichenko & Oleksandr Talavera & Igor Zubenko, 2006.
"Are Airlines' Price-Setting Strategies Different?,"
Discussion Papers of DIW Berlin
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- Bilotkach, Volodymyr & Lakew, Paulos Ashebir, 2014. "On sources of market power in the airline industry: Panel data evidence from the US airports," Transportation Research Part A: Policy and Practice, Elsevier, Elsevier, vol. 59(C), pages 288-305.
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