Oligopoly behaviour in the Trans-Tasman air travel market: The case of kiwi international
AbstractThe duopoly of Air New Zealand and Qantas serving the Trans-Tasman air travel market was disturbed in August 1995 by the entry of a small former charter airline, Kiwi International, based in Hamilton, NZ. Kiwi exited into liquidation in September 1996. The intervening thirteen months saw the entry of a 'fighting brand' no-frills airline, Freedom Air, set up by Air New Zealand to compete directly with Kiwi, and then a general price war initiated by Qantas, which directly preceded Kiwi's demise. Was the behaviour of the incumbent duopolists 'predatory', in the sense of being designed to drive the new entrant from the market? Standard tests based on comparisons of price and costs are inconclusive. The innovation of this paper is to model the oligopolistic behaviour of the firms before and after entry. It is found that the duopolists became substantially more 'competitive' during the price war period, consistent with an interpretation of intent to predate.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal New Zealand Economic Papers.
Volume (Year): 33 (1999)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RNZP20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Lindsey, Robin & West, Douglas S., 2003. "Predatory pricing in differentiated products retail markets," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 21(4), pages 551-592, April.
- Justin P. Johnson & David P. Myatt, 2003.
"Multiproduct Quality Competition: Fighting Brands and Product Line Pruning,"
American Economic Review,
American Economic Association, vol. 93(3), pages 748-774, June.
- David P. Myatt & Justin P. Johnson, 2002. "Multiproduct Quality Competition: Fighting Brands and Product Line Pruning," Economics Series Working Papers 105, University of Oxford, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.