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Code-sharing and its effect on airline fares and welfare

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  • Achim I. Czerny

    ()
    (Workgroup for Infrastructure Policy (WIP), Technische Universit├Ąt Berlin)

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    Abstract

    Airlines frequently use code-share agreements allowing them to market seats on flights operated by partner airlines. Current studies argue that with complementary networks this generates positive welfare effects because fares for interline passengers who rely on the service of multiple airlines are supposed to fall. However, with codeshare agreements airlines can price discriminate between interline and other passengers. This might harm the latter which has been ignored so far. We show that code-share agreements can lead to welfare losses in the case of complementary networks.

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    Bibliographic Info

    Paper provided by Center for Network Industries and Infrastructure (CNI) in its series Working Papers with number 2006-15.

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    Length: 30 pages
    Date of creation: 2006
    Date of revision:
    Handle: RePEc:cni:wpaper:2006-15

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    Related research

    Keywords: Airlines; alliances; code-share agreements; antitrust immunity; price discrimination;

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