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A Competition Model for A Brazilian Air Shuttle Market


  • Oliveira, Alessandro

    (University of Warwick)


This paper aims at developing a competition model for a relevant subset of the Brazilian airline industry: the air shuttle market on the route Rio de Janeiro Ð S*o Paulo, a pioneer service created in 1959. The competition model presented here contains elements of both vertical product differentiation and representative consumer. I also use the conduct parameter approach to infer about the behaviour of airlines in the market under three situations: a quasideregulation rocess (from 1998 on), two price war events (1998 and 2001), and a shock in costs due to currency devaluation (1999). Results permitted making inference on the impacts of liberalisation on competition and investigating an alleged collusive behaviour of 1999.

Suggested Citation

  • Oliveira, Alessandro, 2003. "A Competition Model for A Brazilian Air Shuttle Market," Royal Economic Society Annual Conference 2003 160, Royal Economic Society.
  • Handle: RePEc:ecj:ac2003:160

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    air shuttle; competition; deregulation; product differentiation;

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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