Liberalisation has affected all parts of the air travel industry, with airports as well as airlines increasingly run on commercial lines. This paper models interactions between airports and airlines to show that, for example, the potential benefits to passengers of increased competition between airlines may be (more than) absorbed by the unregulated airports through which they travel, and that effecting airport competition in one country may lead to the majority of the gains going abroad. The policy conclusion is that the (de)regulation of airlines and associated services should be fully co-ordinated and internationally coherent.
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Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number
2005003.
Find related papers by JEL classification: L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation R48 - Urban, Rural, and Regional Economics - - Transportation Systems - - - Government Pricing; Regulatory Policies
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