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Pricing and infrastructure fees in shaping cooperation in a model of high-speed rail and airline competition

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  • Álvarez-SanJaime, Óscar
  • Cantos-Sanchez, Pedro
  • Moner-Colonques, Rafael
  • Sempere-Monerris, Jose J.

Abstract

This paper studies the effects of cooperation in a hub-and-spoke network with high-speed rail and airline competition. The distinctive elements of our analysis are the consideration of: (i) per-passenger airport and rail infrastructure fees; (ii) mixed bundling pricing by partners, and (iii) an airline duopoly in the international market. We show that partners fix the cheapest bundle price of the combined trip, that non-allied operators respond by decreasing the prices per link, and that connecting traffic increases. Per-passenger fees significantly affect the price differences following cooperation. An empirical application confirms that it is privately profitable and that welfare gains are in the range of 0.8–2.2%; these can be higher for lower fees or lower cross-price elasticity between modes.

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  • Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2020. "Pricing and infrastructure fees in shaping cooperation in a model of high-speed rail and airline competition," Transportation Research Part B: Methodological, Elsevier, vol. 140(C), pages 22-41.
  • Handle: RePEc:eee:transb:v:140:y:2020:i:c:p:22-41
    DOI: 10.1016/j.trb.2020.07.007
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    3. Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2021. "The effect of cooperative infrastructure fees on high-speed rail and airline competition," Transport Policy, Elsevier, vol. 112(C), pages 125-141.

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