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Does Airline Competition Work In Short-Haul Markets?

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Author Info
Xavier Fageda

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Abstract

In this paper, we analyze how an airline can take advantage of airport dominance of a whole network in a market characterized by short-haul routes and congestion. In order to tackle this issue, we estimate an equation system, which is based on theoretical grounds, for the Spanish domestic market. We find that costs and demand benefits of airport dominance have to do with providing a high flight frequency. Such benefits can damage seriously the effectiveness of competition as long as the competitive status of major airline’s rivals is threatened.

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File URL: http://129.3.20.41/eps/io/papers/0511/0511010.pdf
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Publisher Info
Paper provided by EconWPA in its series Industrial Organization with number 0511010.

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Length: 31 pages
Date of creation: 16 Nov 2005
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Handle: RePEc:wpa:wuwpio:0511010

Note: Type of Document - pdf; pages: 31
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Web page: http://129.3.20.41

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Related research
Keywords: Air Transportation; Multiple Equation Models; Oligopoly.;

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L - Industrial Organization

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References listed on IDEAS
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  1. Hurdle, Gloria J, et al, 1989. "Concentration, Potential Entry, and Performance in the Airline Industry," Journal of Industrial Economics, Blackwell Publishing, vol. 38(2), pages 119-39, December. [Downloadable!] (restricted)
  2. Marin, Pedro L., 1998. "Productivity differences in the airline industry: Partial deregulation versus short run protection," International Journal of Industrial Organization, Elsevier, vol. 16(4), pages 395-414, July. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
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This page was last updated on 2009-11-13.

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