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Substitution and complementarity in aviation: airports vs airlines

Author

Listed:
  • Pels, Eric
  • Nijkamp, Peter
  • Rietveld, Piet

Abstract

In this paper a model concerning substitution and complementarity on the linkage between airport facilities and airlines from the viewpoint of pricing policy is formulated. This model is used to analyze whether airport pricing policies, e.g. to ensure cost recovery, are compatible with competition for transfer passengers. It is found that airports with a high volume of demand can pursue cost recovery and still be the most preferred hub. Airports with a low level of demand will not be the preferred hub, even if the larger airport charges higher taxes to recover costs.

Suggested Citation

  • Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 1997. "Substitution and complementarity in aviation: airports vs airlines," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 33(4), pages 275-286, December.
    • Handle: RePEc:eee:transe:v:33:y:1997:i:4:p:275-286
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Ming Hsin Lin, 2005. "Alliances and entry in a simple airline network," Economics Bulletin, AccessEcon, vol. 12(4), pages 1-11.
    2. de Luca, Stefano, 2012. "Modelling airport choice behaviour for direct flights, connecting flights and different travel plans," Journal of Transport Geography, Elsevier, vol. 22(C), pages 148-163.
    3. Wei, Wenbin, 2006. "Impact of landing fees on airlines’ choice of aircraft size and service frequency in duopoly markets," Journal of Air Transport Management, Elsevier, vol. 12(6), pages 288-292.
    4. Jan K. Brueckner, 2004. "Network Structure and Airline Scheduling," Journal of Industrial Economics, Wiley Blackwell, vol. 52(2), pages 291-312, June.
    5. Jolian McHardy & Steve Trotter, 2005. "Airport Deregulation and Airline Competition," Working Papers 2005003, The University of Sheffield, Department of Economics, revised Jan 2005.
    6. Kawasaki, Akio, 2008. "Network effects, heterogeneous time value and network formation in the airline market," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 388-403, July.
    7. Eric Pels & Peter Nijkamp & Piet Rietveld, 1998. "Equilibrium Airfares, Frequencies and Airport Taxes in a Multiple Airport Region: An Application of the Nested Logit Demand Model," Tinbergen Institute Discussion Papers 98-073/3, Tinbergen Institute.
    8. Gillen, David & Morrison, William, 2003. "Bundling, integration and the delivered price of air travel: are low cost carriers full service competitors?," Journal of Air Transport Management, Elsevier, vol. 9(1), pages 15-23.
    9. Eric Pels & Peter Nijkamp & Piet Rietveld, 1998. "Airport Choice in a Multiple Airport Region: An Empirical Analysis for the San Francisco Bay Area," Tinbergen Institute Discussion Papers 98-041/3, Tinbergen Institute.
    10. Derudder, Ben & Devriendt, Lomme & Witlox, Frank, 2010. "A spatial analysis of multiple airport cities," Journal of Transport Geography, Elsevier, vol. 18(3), pages 345-353.
    11. Eric Pels & Peter Nijkamp & Piet Rietveld, 2001. "Airport and Airline Choice in a Multiple Airport Region: An Empirical Analysis for the San Francisco Bay Area," Regional Studies, Taylor & Francis Journals, vol. 35(1), pages 1-9.
    12. Li, Sui-Ling, 2014. "The cost allocation approach of airport service activities," Journal of Air Transport Management, Elsevier, vol. 38(C), pages 48-53.
    13. repec:ebl:ecbull:v:12:y:2005:i:4:p:1-11 is not listed on IDEAS
    14. MartÄ±Ì n, Juan Carlos & Román, Concepción, 2001. "An application of DEA to measure the efficiency of Spanish airports prior to privatization," Journal of Air Transport Management, Elsevier, vol. 7(3), pages 149-157.
    15. McHardy, Jolian & Trotter, Stephen, 2006. "Competition and deregulation: Do air passengers get the benefits?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 74-93, January.
    16. Eric Pels & Peter Nijkamp & Piet Rietveld, 1998. "Access to airports : A case study for the San Francisco Bay Area," ERSA conference papers ersa98p199, European Regional Science Association.
    17. Akio Kawasaki, 2012. "Hub location with scheduling effects in a monopoly airline market," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 805-819, December.

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