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The Home Carrier Advantage in Civil Aviation

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Author Info

  • Mark Lijesen

    ()
    (Netherlands Bureau for Economic Policy Analysis (CPB))

  • Peter Nijkamp

    ()
    (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

  • Eric Pels

    ()
    (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

Abstract

This 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 Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 05-011/3.

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Date of creation: 21 Jan 2005
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Handle: RePEc:dgr:uvatin:20050011

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

Related research

Keywords: Airlines; airports; networks; homecarrier advantage;

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References

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  16. 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.
  17. Schipper, Youdi & Rietveld, Piet & Nijkamp, Peter, 2003. "Airline deregulation and external costs: a welfare analysis," Transportation Research Part B: Methodological, Elsevier, vol. 37(8), pages 699-718, September.
  18. Swait, Joffre & Bernardino, Adriana, 2000. "Distinguishing taste variation from error structure in discrete choice data," Transportation Research Part B: Methodological, Elsevier, vol. 34(1), pages 1-15, January.
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