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Airport and Airline Substitution Effects in Multi-Airport Markets

In: The Economics of International Airline Transport

Author

Listed:
  • Dan Mahoney
  • Wesley W. Wilson

Abstract

Airline travel is composed of business and nonbusiness travelers, each with different preferences that give rise to differences in demand elasticities and substitution not only across airlines but also airports. In this study, we develop and estimate a model of airline wherein consumers choose which airports and airline to use that allows for unobserved differences between travelers (e.g., business and nonbusiness travelers). The results point to the role that airports themselves play in the ultimate selection of a flight, and that there are strong interactive effects between the airlines’ networks and the consumers’ preferences across airports.

Suggested Citation

  • Dan Mahoney & Wesley W. Wilson, 2014. "Airport and Airline Substitution Effects in Multi-Airport Markets," Advances in Airline Economics, in: The Economics of International Airline Transport, volume 4, pages 309-337, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:aiaezz:s2212-160920140000004011
    DOI: 10.1108/S2212-160920140000004011
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    More about this item

    Keywords

    Airline demand; airline and airport substitution; choice modeling; L93; R4;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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