The Home Carrier Advantage in Civil Aviation
AbstractThis paper analyzes the relative economic power position of home carriers in hub-and-spoke systems. Hub-and-spoke systems may lower costs on densely traveled routes and enable economically viable operations on less densely traveled routes. The reverse side is probably that carriers enjoy significant market power at their home base, often labeled the home carrier advantage. The paper offers a concise overview of the literature in this field, and addresses next empirically this issue for European home carriers. We found empirically that at least some European carriers charge premiums for flights originating from their hubs. The hub premiums of Lufthansa, Swissair and Air France are significantly higher than those of the other companies in our sample.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 05-011/3.
Date of creation: 21 Jan 2005
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Airlines; airports; networks; homecarrier advantage;
Find related papers by JEL classification:
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
- D4 - Microeconomics - - Market Structure and Pricing
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