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The Performance of European Full Service Airlines after Liberalisation: An Econometric Analysis

  • Lara Gitto

    ()

    (University of Rome "Tor Vergata" and University of Messina)

  • Fulvio Minervini

    ()

    (University of Macerata and University of Warwick)

Deregulation in the airline industry has forced full service airlines to change their strategies in order to respond to increasing challenges. In this paper, an econometric analysis of the possible determinants of economic performance of full service airlines after liberalisation has been carried out. A fixed effects model was used and the performance of ten European full service airlines has been analysed over a period of 11 years. Variables considered in this analysis were the number and type of aircraft in the fleet, the number and type of destinations, investments, number of employees and alliances. The analysis suggests that full service airlines should adjust fleet composition and re-organise operations on their routes in order to react to the increasingly competitive environment.

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Article provided by SIPI Spa in its journal Rivista di Politica Economica.

Volume (Year): 97 (2007)
Issue (Month): 1 (January-February)
Pages: 105-122

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Handle: RePEc:rpo:ripoec:v:97:y:2007:i:1:p:105-122
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  1. Gorin, Thomas & Belobaba, Peter, 2004. "Impacts of entry in airline markets: effects of revenue management on traditional measures of airline performance," Journal of Air Transport Management, Elsevier, vol. 10(4), pages 257-268.
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  6. Tretheway, Michael W, 2004. "Distortions of airline revenues: why the network airline business model is broken," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 3-14.
  7. Neven, Damien J. & Roller, Lars-Hendrik, 1996. "Rent sharing in the European airline industry," European Economic Review, Elsevier, vol. 40(3-5), pages 933-940, April.
  8. Borenstein, S., 1991. "The Evolution of U.S. Airline Competition," Papers 389, California Davis - Institute of Governmental Affairs.
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