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Schedule Competition Revisited

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  • Jan K. Brueckner

Abstract

This paper proposes and analyses a simple model of schedule competition, where transport providers choose service frequency and fares. The key assumptions are that passengers care about average schedule delay, a consequence of committing to travel before knowing their departure times, and that they exhibit brand loyalty to particular carriers. While the most general version of the model is not amenable to analysis, familiar functional-form assumptions produce a tractable framework that generates a host of useful comparativestatic results, along with a clear-cut efficiency evaluation. The model also sheds light on the phenomenon of excess transport capacity. © 2010 LSE and the University of Bath

Suggested Citation

  • Jan K. Brueckner, 2010. "Schedule Competition Revisited," Journal of Transport Economics and Policy, University of Bath, vol. 44(3), pages 261-285, September.
  • Handle: RePEc:tpe:jtecpo:v:44:y:2010:i:3:p:261-285
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    Citations

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    Cited by:

    1. Kuangnen Cheng & Hui-Ping Chen & Jason Lee, 2015. "Competition behavior in service frequency for U.S. airlines," Service Business, Springer;Pan-Pacific Business Association, vol. 9(1), pages 1-16, March.
    2. de Palma, André & Ordás Criado, Carlos & Randrianarisoa, Laingo M., 2018. "When Hotelling meets Vickrey. Service timing and spatial asymmetry in the airline industry," Journal of Urban Economics, Elsevier, vol. 105(C), pages 88-106.
    3. Brueckner, Jan K. & Luo, Dan, 2014. "Measuring strategic firm interaction in product-quality choices: The case of airline flight frequency," Economics of Transportation, Elsevier, vol. 3(1), pages 102-115.
    4. Abdelghany, Ahmed & Abdelghany, Khaled & Azadian, Farshid, 2023. "The airline seat capacity allocation problem: An expected marginal profit approach," Journal of Air Transport Management, Elsevier, vol. 112(C).
    5. Evangelinos, Christos & Obermeyer, Andy & Püschel, Ronny, 2011. "Preisdispersion und Wettbewerb im Luftverkehr: Ein theoretischer und empirischer Überblick," Discussion Papers 2/2011, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.
    6. Fageda, Xavier & Flores-Fillol, Ricardo & Lin, Ming Hsin, 2020. "Vertical differentiation and airline alliances: The effect of antitrust immunity," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    7. Shah, Nilopa & Brueckner, Jan K., 2012. "Price and frequency competition in freight transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 938-953.
    8. Brueckner, Jan K. & Flores-Fillol, Ricardo, 2020. "Market structure and quality determination for complementary products: Alliances and service quality in the airline industry," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    9. Ko, Young Dae, 2016. "An airline's management strategies in a competitive air transport market," Journal of Air Transport Management, Elsevier, vol. 50(C), pages 53-61.
    10. Doi, Naoshi & Kono, Tatsuhito & Suzaki, Izumo, 2023. "Optimizing Multiple Airport Charges with Endogenous Airline Quality Considering the Marginal Cost of Public Funds," MPRA Paper 116176, University Library of Munich, Germany.
    11. Jan K. Brueckner & Ricardo Flores-Fillol, 2018. "Airline Alliances and Service Quality," CESifo Working Paper Series 7226, CESifo.
    12. Vikrant Vaze & Cynthia Barnhart, 2012. "Modeling Airline Frequency Competition for Airport Congestion Mitigation," Transportation Science, INFORMS, vol. 46(4), pages 512-535, November.
    13. Doi, Naoshi & Ohashi, Hiroshi, 2019. "Market structure and product quality: A study of the 2002 Japanese airline merger," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 158-193.
    14. Oliveira, Marcus V.R. & Oliveira, Alessandro V.M., 2018. "What drives effective competition in the airline industry? An empirical model of city-pair market concentration," Transport Policy, Elsevier, vol. 63(C), pages 165-175.
    15. Czerny, Achim I. & Zhang, Anming, 2015. "How to mix per-flight and per-passenger based airport charges," Transportation Research Part A: Policy and Practice, Elsevier, vol. 71(C), pages 77-95.
    16. Jiang, Mei & Jiang, Changmin & Xiao, Yi-bin & Wang, Chunan, 2021. "Air-HSR cooperation: Impacts on service frequency and environment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 150(C).
    17. Czerny, Achim I. & Cowan, Simon & Zhang, Anming, 2017. "How to mix per-flight and per-passenger based airport charges: The oligopoly case," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 483-500.

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