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A Theoretical Framework for the Brazilian Airline Competitive Market Environment

  • Hugo Ferreira Braga Tadeu

    ()

    (Centro Universit¨¢rio UNA and Dom Cabral Foundation, Brazil)

  • Jersone Tasso Moreira Silva

    ()

    (School of Business Administration, FUMEC University, Brazil)

Registered author(s):

    The purpose of this article is to elaborate a theoretical model that has adherence with the airlines companies¡¯ experiences. The objective of this paper is to help in the search of the necessary conditions to overcome the competition with appropriate pricing and consistent profits in this market. When looking at the Brazilian market, this study is appropriate due to the accelerated growth of this sector. The methodology is based on a literature review in which the proposed model will be obtained from a database involving academic articles, dissertations, theses and books. This article is to contribute in the analysis of the necessary conditions for the longevity of airlines companies. Finally, the originality of this work lies in the proposal of a theoretical model as a profit function in market dynamics. This model can be applied by any management of airline companies.

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    Article provided by Better Advances Press, Canada in its journal Review of Economics & Finance.

    Volume (Year): 2 (2012)
    Issue (Month): (May)
    Pages: 97-106

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    Handle: RePEc:bap:journl:120209
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    1. repec:fgv:epgrbe:v:60:n:4:a:6 is not listed on IDEAS
    2. 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.
    3. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    4. Edlin, Aaron S. & Farrell, Joseph, 2002. "The American Airlines Case: A Chance to Clarify Predation Policy," Department of Economics, Working Paper Series qt0wx7c4zf, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    5. Brueckner, Jan K., 2001. "The economics of international codesharing: an analysis of airline alliances," International Journal of Industrial Organization, Elsevier, vol. 19(10), pages 1475-1498, December.
    6. Daniel, Joseph I., 2001. "Distributional Consequences of Airport Congestion Pricing," Journal of Urban Economics, Elsevier, vol. 50(2), pages 230-258, September.
    7. repec:dgr:uvatin:20010047 is not listed on IDEAS
    8. Combes, Pierre-Philippe & Linnemer, Laurent, 2000. "Intermodal competition and regional inequalities," Regional Science and Urban Economics, Elsevier, vol. 30(2), pages 131-184, March.
    9. Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, vol. 63(2), pages 327-70, March.
    10. Severin Borenstein, 1989. "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 344-365, Autumn.
    11. Berry, Steven T, 1990. "Airport Presence as Product Differentiation," American Economic Review, American Economic Association, vol. 80(2), pages 394-99, May.
    12. Borenstein, Severin, 1988. "On the Efficiency of Competitive Markets for Operating Licenses," The Quarterly Journal of Economics, MIT Press, vol. 103(2), pages 357-85, May.
    13. Attiat F. Ott & Oswaldo J. Patino, 2011. "Alliances as an Integrating Market Instrument: A Case Study of Airline Alliances," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 104-118, February.
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