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Asymmetric Regulation and Airport Dominance in International Aviation: Evidence from the London‐New York Market

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  • Volodymyr Bilotkach

Abstract

International airline markets have the rather unusual feature of partial deregulation with asymmetric regulatory constraints: Some carriers face entry restrictions different from others for a given route. Like domestic air travel, international travel also features hubs, where a single carrier may dominate a given airport. This article examines the effects of asymmetric regulation and airport dominance on airlines' fares in the London‐New York market, a market uniquely suited for identifying the effects of both of these issues. Comparison data from the symmetrically regulated Frankfurt‐New York and Paris‐New York markets enable a difference‐in‐differences identification strategy. Regulatory restrictions are found to decrease an affected carrier's fares, whereas airport dominance increases a dominant airline's fares.

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  • Volodymyr Bilotkach, 2007. "Asymmetric Regulation and Airport Dominance in International Aviation: Evidence from the London‐New York Market," Southern Economic Journal, John Wiley & Sons, vol. 74(2), pages 505-523, October.
    • Handle: RePEc:wly:soecon:v:74:y:2007:i:2:p:505-523
    DOI: 10.1002/j.2325-8012.2007.tb00850.x
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    Cited by:

    1. Bauner, Christoph & Liu, Zexuan, 2022. "Incumbents’ pricing and nonpricing responses to entry in vertically differentiated markets," Journal of Air Transport Management, Elsevier, vol. 105(C).

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