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Do European Carriers dominate their Hubs?

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Author Info

  • Mark G. Lijesen

    (CPB, Netherlands Bureau for Economic Policy Analysis, The Hague)

  • Piet Rietveld

    ()

  • Peter Nijkamp

    ()
    (Vrije Universiteit Amsterdam)

Abstract

We analyze the phenomenon of hub dominance by developing a model relating faresto distance, using the mainleg of intercontinental flights for scaling purposes. Our results indicate thatat least some of the major Europeancarriers place a mark up on flights originating from or going to their hubs.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-071/3.

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Date of creation: 08 Aug 2000
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Handle: RePEc:dgr:uvatin:20000071

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Web page: http://www.tinbergen.nl

Related research

Keywords: Civil aviation; Hub and spoke system; Market power;

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  1. Borenstein, Severin, 1991. "The Dominant-Firm Advantage in Multiproduct Industries: Evidence from the U.S. Airlines," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(4), pages 1237-66, November.
  2. Steven Berry & Michael Carnall & Pablo T. Spiller, 1996. "Airline Hubs: Costs, Markups and the Implications of Customer Heterogeneity," NBER Working Papers 5561, National Bureau of Economic Research, Inc.
  3. Berry, Steven T, 1990. "Airport Presence as Product Differentiation," American Economic Review, American Economic Association, vol. 80(2), pages 394-99, May.
  4. Evans, William N & Kessides, Ioannis N, 1993. "Localized Market Power in the U.S. Airline Industry," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 66-75, February.
  5. Brueckner, Jan K & Spiller, Pablo T, 1994. "Economies of Traffic Density in the Deregulated Airline Industry," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 37(2), pages 379-415, October.
  6. Severin Borenstein, 1989. "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 344-365, Autumn.
  7. Douglas W. Caves & Laurits R. Christensen & Michael W. Tretheway, 1984. "Economies of Density versus Economies of Scale: Why Trunk and Local Service Airline Costs Differ," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 471-489, Winter.
  8. Hansen, Mark, 1990. "Airline competition in a hub-dominated environment: An application of noncooperative game theory," Transportation Research Part B: Methodological, Elsevier, vol. 24(1), pages 27-43, February.
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Cited by:
  1. Marco Alderighi & Alessandro Cento & Peter Nijkamp & Piet Rietveld, 2004. "The Entry of Low-Cost Airlines: Price Competition in the European Airline Market," Tinbergen Institute Discussion Papers 04-074/3, Tinbergen Institute.

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