Airportâ€“airline vertical relationships, their effects and regulatory policyÂ implications
This paper examines the forms and effects of vertical relationships between airports and airlines with a focus on the North American and European aviation markets. We find that such vertical relationships enables those participating to achieve various benefits and may be formed as a competitive response toÂ other competing airportâ€“airline alliances. In some cases, vertical airportâ€“airline relationships strengthen the hub status of major airports, leading to increased employment and service quality in local markets. On the other hand, preferential treatment of a particular airline by an airport may enhance that airlineâ€™s market power, allowing it to dominate the airport and charge hub premiums. The competition and welfare implications of airportâ€“airline vertical alliances can be complicated and two-sided, subject to the influences of other factors such as the market structures of the airline and airport markets.
Volume (Year): 17 (2011)
Issue (Month): 6 ()
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