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Coalitions in the airline industry: an empirical approach

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  • David Bartolini

    ()
    (Department of Economics, Università Politecnica delle Marche.)

  • Alberto Gaggero

    ()
    (Department of Economics, University of Pavia)

Abstract

This paper conducts an empirical analysis of the determinants of airline alliances. Well established airlines with large passengers' volumes are more likely to participate in an alliance and are also essential for alliance survivability. In line with this finding, older air-lines have a higher probability of being part of an alliance. Airlines operating with high load factors consider alliance participation as a significant alternative to fleet capacity expansion. As their market share grows, alliances become more appealing to airlines. Competitors' decision to enter an alliance tends to have a positive impact on alliance participation. The relatively similar magnitude and effect of the regressors' coefficients across different alliance choices, suggests that the airline's major decision is not to choose a specific alliance, but rather considering whether to enter into an alliance, as a possible strategy within its business model.

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File URL: http://economia.unipv.it/docs/dipeco/quad/ps/RePEc/pav/wpaper/q165.pdf
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Bibliographic Info

Paper provided by University of Pavia, Department of Economics and Quantitative Methods in its series Quaderni di Dipartimento with number 165.

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Length: 28 pages
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:pav:wpaper:165

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Related research

Keywords: Discrete choice model; Oneworld; Sky Team; Star Alliance.;

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Cited by:
  1. Marco Alderighi, 2013. "Air accessibility and the export of Italian manufacture in Europe: Evidence at regional level," ERSA conference papers ersa13p1304, European Regional Science Association.

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