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Hay competencia en el mercado europeo de transporte aereo?: el caso espanol

Listed author(s):
  • Xavier Fageda Sanjuan

    (Universitat de Barcelona)

The liberalisation of air transport that took place in the European Union at the beginning of the nineties has involved positive effects on the welfare traveller. However, there is an agreement in the academic literature that such effects depend on the existence of an effective competition at the level of the route. In this way, we deal with competition concerns referred to the scale advantages of major airlines in each domestic market. In addition to this, we try to capture product differentiation as one of the essential features of the airline industry. In order to achieve these goals, we firstly analyse the main economic aspects that determine competition in the airline industry. And secondly, we implement an empirical model based on a three equations system, which is estimated through the instrumental variables technique. The sample used includes most of routes of the Spanish domestic market of regular flights where competition does exist for 2001. Our results show the existence of different competition conditions according to the market segment in which airlines address their services. Indeed, price (quality) competition seems to be dominant in the segment of leisure (business) passengers. Furthermore, we also find that the major airlines dominance of the market relies on the competitive advantages in terms of cost and demand that provides the control of the Spanish airport network. We conclude that the maintenance and/or increase of the air liberalisation benefits require expanding liberalisation to airports space allocation and decentralising its management.

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Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 109.

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Length: 33 pages
Date of creation: 2003
Handle: RePEc:bar:bedcje:2003109
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