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Airline Market Concentration in Europe

In: Digitalization Across Organizational Levels

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  • Tobias Grosche

    (Worms University of Applied Sciences)

Abstract

Despite the constant growth in air passengers in Europe until 2019, many airlines had to file for insolvency and left the market. This often raised concerns by competition authorities regarding market concentration by the remaining air service providers. But at the same time, these remaining market participants still complain about protectionism and non-consolidated market structures. Against this backdrop, the aim of this paper is to assess the level of competition in airline service provision in Europe by measuring market concentration for city pairs within and to/from Europe. Market concentration on a city pair is measured using the Herfindahl-Hirschman Index (HHI) based on quality-weighted nonstop and connecting flights, and results for individual city pairs are aggregated based on their weight according to a gravity model. This allows to measure the level of competition on a city, country, or region level or any combination thereof. Results show that despite a reduction in the number of airlines operating in Europe, overall market concentration has been reduced but still is higher than concentration levels in the US market or the worldwide average.

Suggested Citation

  • Tobias Grosche, 2022. "Airline Market Concentration in Europe," Progress in IS, in: Jens Dibbern & Jens Förderer & Thomas Kude & Franz Rothlauf & Kai Spohrer (ed.), Digitalization Across Organizational Levels, pages 267-283, Springer.
    • Handle: RePEc:spr:prochp:978-3-031-06543-9_11
    DOI: 10.1007/978-3-031-06543-9_11
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