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Joint Ventures in the Transatlantic Airline Market

In: Airline Economics in Europe

Author

Listed:
  • Xavier Fageda
  • Ricardo Flores-Fillol
  • Bernd Theilen

Abstract

This study investigates, both theoretically and empirically, the effects of joint ventures on traffic. Although alliances are a pre-condition for joint ventures, both cooperation agreements are different in their nature. The reason is that alliances are revenue-sharing agreements, whereas joint ventures also involve a cost-sharing commitment. Our empirical analysis focuses on the transatlantic market, including non-stop routings (interhub markets) and one-stopover routings (interline markets). Our theoretical and empirical findings emphasize the relevance of economies of traffic density and reveal a positive effect of joint ventures on traffic, both in interhub and interline markets.

Suggested Citation

  • Xavier Fageda & Ricardo Flores-Fillol & Bernd Theilen, 2019. "Joint Ventures in the Transatlantic Airline Market," Advances in Airline Economics, in: Airline Economics in Europe, volume 8, pages 117-136, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:aiaezz:s2212-160920190000008006
    DOI: 10.1108/S2212-160920190000008006
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    Citations

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    Cited by:

    1. Dominik Boniecki & Elzbieta Marciszewska, 2021. "Non-Cooperative Game Theory in Measuring Strategic Interactions between Airline Joint-Venture Alliances," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 152-164.
    2. 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).

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