Advanced Search
MyIDEAS: Login to save this paper or follow this series

Airline alliances, antitrust immunity and market foreclosure

Contents:

Author Info

  • Bilotkach, Volodymyr
  • Hüschelrath, Kai

Abstract

We examine the issue of market foreclosure by airline partnerships with antitrust immunity. Overlapping data on frequency of service and passenger volumes on non-stop transatlantic routes with information on the dynamics of airline partnerships, we find evidence consistent with the airlines operating under antitrust immunity refusing to accept connecting passengers from the outside carriers at respective hub airports. Following the antitrust immunity, airlines outside the partnership reduce their traffic to the partner airlines' hub airports by 4.1-11.5 percent. We suggest regulators should take possible market foreclosure effects into account when assessing the competitive effects of antitrust immunity for airline alliances. --

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://econstor.eu/bitstream/10419/66121/1/729304582.pdf
Download Restriction: no

Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 10-083 [rev.].

as in new window
Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:zbw:zewdip:10083r

Contact details of provider:
Postal: L 7,1; D - 68161 Mannheim
Phone: +49/621/1235-01
Fax: +49/621/1235-224
Email:
Web page: http://www.zew.de/
More information through EDIRC

Related research

Keywords: air transportation; alliances; antitrust immunity; foreclosure;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Mullin, Joseph C & Mullin, Wallace P, 1997. "United States Steel's Acquisition of the Great Northern Ore Properties: Vertical Foreclosure or Efficient Contractual Governance?," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 13(1), pages 74-100, April.
  2. Volodymyr Bilotkach & Xavier Fageda & Ricardo Flores-Fillol, 2008. "Scheduled service versus personal transportation: the role of distance," Working Papers, Xarxa de Referència en Economia Aplicada (XREAP) XREAP2008-13, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2008.
  3. Ali Hortaçsu & Chad Syverson, 2007. "Cementing Relationships: Vertical Integration, Foreclosure, Productivity, and Prices," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 115, pages 250-301.
  4. Pai, Vivek, 2010. "On the factors that affect airline flight frequency and aircraft size," Journal of Air Transport Management, Elsevier, Elsevier, vol. 16(4), pages 169-177.
  5. Michael Riordan, 1996. "Anticompetitive Vertical Integration by a Dominant Firm," Papers, Boston University - Industry Studies Programme 0064, Boston University - Industry Studies Programme.
  6. Tasneem Chipty, 2001. "Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry," American Economic Review, American Economic Association, American Economic Association, vol. 91(3), pages 428-453, June.
  7. Volodymyr Bilotkach, 2005. "Price Competition between International Airline Alliances," Journal of Transport Economics and Policy, London School of Economics and University of Bath, London School of Economics and University of Bath, vol. 39(2), pages 167-190, May.
  8. Bilotkach, Volodymyr & Hüschelrath, Kai, 2012. "Airline alliances and antitrust policy: The role of efficiencies," Journal of Air Transport Management, Elsevier, Elsevier, vol. 21(C), pages 76-84.
  9. Bilotkach, Volodymyr, 2007. "Complementary versus semi-complementary airline partnerships," Transportation Research Part B: Methodological, Elsevier, Elsevier, vol. 41(4), pages 381-393, May.
  10. Volodymyr Bilotkach, 2011. "Multimarket Contact and Intensity of Competition: Evidence from an Airline Merger," Review of Industrial Organization, Springer, Springer, vol. 38(1), pages 95-115, January.
  11. Brueckner, Jan K. & Proost, Stef, 2010. "Carve-outs under airline antitrust immunity," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 28(6), pages 657-668, November.
  12. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  13. Justine S. Hastings & Richard J. Gilbert, 2005. "MARKET POWER, VERTICAL INTEGRATION AND THE WHOLESALE PRICE OF GASOLINE -super-* ," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 53(4), pages 469-492, December.
  14. Jan K. Brueckner, 2003. "International Airfares in the Age of Alliances: The Effects of Codesharing and Antitrust Immunity," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 105-118, February.
  15. Slade, Margaret E, 1998. "Beer and the Tie: Did Divestiture of Brewer-Owned Public Houses Lead to Higher Beer Prices?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 108(448), pages 565-602, May.
  16. Chen, Yongmin & Gayle, Philip G., 2007. "Vertical contracting between airlines: An equilibrium analysis of codeshare alliances," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 25(5), pages 1046-1060, October.
  17. Bilotkach, Volodymyr & Hüschelrath, Kai, 2010. "Antitrust immunity for airline alliances," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 10-080, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  18. Brueckner, Jan K., 2001. "The economics of international codesharing: an analysis of airline alliances," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 19(10), pages 1475-1498, December.
  19. Justine S. Hastings, 2004. "Vertical Relationships and Competition in Retail Gasoline Markets: Empirical Evidence from Contract Changes in Southern California," American Economic Review, American Economic Association, American Economic Association, vol. 94(1), pages 317-328, March.
  20. Jong-Hun Park & Anming Zhang, 2000. "An Empirical Analysis of Global Airline Alliances: Cases in North Atlantic Markets," Review of Industrial Organization, Springer, Springer, vol. 16(4), pages 367-384, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Stephen Martin, 2012. "Market Structure and Market Performance," Review of Industrial Organization, Springer, Springer, vol. 40(2), pages 87-108, March.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:10083r. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.