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Competition in Air Transport

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  • Mar González-Savignat

Abstract

This article analyses the potential of the high speed train to compete with the airline market. The context proposed is hypothetical, given that the high speed train alternative is not yet available on the route subject to research. In order to model passenger preferences relative to the characteristics of the alternatives, experimental design techniques are applied, which allow for the design of the market that will be evaluated by current airline passengers. Based upon the information collected, modal choices are analysed, estimating a logit model with both alternatives. Demand modelling allows us to predict the substitutability level of the high speed train in comparison with the plane for different types of journey and traveller. The results obtained confirm that the high speed train will have an important impact on the airline market, with a considerable deviation of passengers towards the new railway service. The simulation of different policies related to service variables stresses the fact that this impact will mainly depend on travel time, given that as this time increases, the high speed train will lose market share. © The London School of Economics and the University of Bath 2004

Suggested Citation

  • Mar González-Savignat, 2004. "Competition in Air Transport," Journal of Transport Economics and Policy, University of Bath, vol. 38(1), pages 77-107, January.
  • Handle: RePEc:tpe:jtecpo:v:38:y:2004:i:1:p:77-107
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    Cited by:

    1. Capozza, Claudia, 2015. "The effect of rail travel time on airline fares: first evidence from the Italian passenger market," Working Papers 1503, SIET Società Italiana di Economia dei Trasporti e della Logistica.
    2. Nicole Adler & Chris Nash & Eric Pels, 2008. "High-Speed Rail & Air Transport Competition," Tinbergen Institute Discussion Papers 08-103/3, Tinbergen Institute.
    3. Capozza, Claudia, 2015. "The effect of rail travel time on airline fares: first evidence from the Italian passenger market," Working Papers 15_3, SIET Società Italiana di Economia dei Trasporti e della Logistica.
    4. Bilotkach, Volodymyr & Fageda, Xavier & Flores-Fillol, Ricardo, 2010. "Scheduled service versus personal transportation: The role of distance," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 60-72, January.
    5. Bergantino, Angela Stefania & Capozza, Claudia & Capurso, Mauro, 2015. "The impact of open access on intra- and inter-modal rail competition. A national level analysis in Italy," Working Papers 15_2, SIET Società Italiana di Economia dei Trasporti e della Logistica.
    6. Concepción Román, 2008. "Competencia intermodal en el corredor Madrid-Zaragoza-Barcelona ante la introducción del tren de alta velocidad," Economic Reports 11-08, FEDEA.
    7. Bergantino, Angela S. & Capozza, Claudia & Capurso, Mauro, 2015. "The impact of open access on intra- and inter-modal rail competition. A national level analysis in Italy," Transport Policy, Elsevier, vol. 39(C), pages 77-86.
    8. Makoto Tsukai & Makoto Okumura, 2005. "Spatial externality of railway service improvement - To understand the Japanese inter-regional transportation service improvements," ERSA conference papers ersa05p416, European Regional Science Association.
    9. Adler, Nicole & Pels, Eric & Nash, Chris, 2010. "High-speed rail and air transport competition: Game engineering as tool for cost-benefit analysis," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 812-833, August.
    10. Christiaan Behrens & Mark Leijsen, 2015. "Measuring Competition Intensity; An Application to Air/HSR Transport Markets," Tinbergen Institute Discussion Papers 15-075/VIII, Tinbergen Institute.
    11. Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2015. "A model of internal and external competition in a High Speed Rail line," Economics of Transportation, Elsevier, vol. 4(3), pages 178-187.

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