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The impact of airport fees on fares for the leisure air travel market: The case of Spain

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  • Sainz-González, Rubén
  • Núnez-Sánchez, Ramón
  • Coto-Millán, Pablo

Abstract

Panel data is used to determine the incidence of airport fees on fares in the Spanish leisure market airlines. We also study its structure through an empirical specification of a pricing and demand equation system. The results show the existence of market power, strategic behavior and density economics. We also demonstrate that airlines pass all the airport fees onto customers by increasing fares. Furthermore, we find that the behavior of airlines in routes with the presence of low cost carriers do not differ from other routes.

Suggested Citation

  • Sainz-González, Rubén & Núnez-Sánchez, Ramón & Coto-Millán, Pablo, 2011. "The impact of airport fees on fares for the leisure air travel market: The case of Spain," Journal of Air Transport Management, Elsevier, vol. 17(3), pages 158-162.
    • Handle: RePEc:eee:jaitra:v:17:y:2011:i:3:p:158-162
    DOI: 10.1016/j.jairtraman.2010.12.003
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    References listed on IDEAS

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    1. Xavier Fageda, 2006. "Measuring Conduct and Cost Parameters in the Spanish Airline Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(4), pages 379-399, June.
    2. Karlsson, Joakim & Odoni, Amedeo & Yamanaka, Shiro, 2004. "The impact of infrastructure-related taxes and fees on domestic airline fares in the US," Journal of Air Transport Management, Elsevier, vol. 10(4), pages 283-291.
    3. James A. Brander & Anming Zhang, 1990. "Market Conduct in the Airline Industry: An Empirical Investigation," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 567-583, Winter.
    4. 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.
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    Cited by:

    1. Xi Wan & Benteng Zou, 2020. "Airport Competition in Two-sided Markets," DEM Discussion Paper Series 20-01, Department of Economics at the University of Luxembourg.
    2. Yang, Yang & Mueller, Noah J. & Croes, Robertico R., 2016. "Market accessibility and hotel prices in the Caribbean: The moderating effect of quality-signaling factors," Tourism Management, Elsevier, vol. 56(C), pages 40-51.
    3. Gundelfinger-Casar, Javier & Coto-Millán, Pablo, 2018. "Measuring the main determinants of tourism flows to the Canary Islands from mainland Spain," Journal of Air Transport Management, Elsevier, vol. 70(C), pages 83-90.

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