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Air services on thin routes: Regional versus low-cost airlines

  • Xavier Fageda

    ()

    (Faculty of Economics, University of Barcelona)

  • Ricardo Flores-Fillol

    ()

    (Universitat Rovira i Virgili)

Registered author(s):

    An examination of the impact in the US and EU markets of two major innovations in the provision of air services on thin routes - regional jet technology and the low-cost business model - reveals significant differences. In the US, regional airlines monopolize a high proportion of thin routes, whereas low-cost carriers are dominant on these routes in Europe. Our results have different implications for business and leisure travelers, given that regional services provide a higher frequency of flights (at the expense of higher fares), while low-cost services offer lower fares (at the expense of lower flight frequencies).

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    File URL: http://www.ub.edu/irea/working_papers/2011/201123.pdf
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    Paper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number 201123.

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    Length: 45 pages
    Date of creation: Oct 2011
    Date of revision: Oct 2011
    Handle: RePEc:ira:wpaper:201123
    Contact details of provider: Postal: Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona
    Web page: http://www.ub.edu/irea/

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    1. Dresner, Martin & Windle, Robert & Zhou, Ming, 2002. "Regional jet services: supply and demand," Journal of Air Transport Management, Elsevier, vol. 8(5), pages 267-273.
    2. Volodymir BilotKach & Xavier Fageda & Ricardo Flores-Fillol, 2009. "Scheduled service versus personal transportation: the role of distance," Working Papers 2009-10, FEDEA.
    3. Flores-Fillol, Ricardo, 2010. "Congested hubs," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 358-370, March.
    4. Button, Kenneth & Lall, Somik & Stough, Roger & Trice, Mark, 1999. "High-technology employment and hub airports," Journal of Air Transport Management, Elsevier, vol. 5(1), pages 53-59.
    5. Gaggero, Alberto A. & Piga, Claudio A., 2010. "Airline competition in the British Isles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(2), pages 270-279, March.
    6. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "On the optimal distribution of traffic of network airlines," European Economic Review, Elsevier, vol. 56(6), pages 1164-1179.
    7. Youdi Schipper & Piet Rietveld & Peter Nijkamp, 2002. "European Airline Reform: An Empirical Welfare Analysis," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 36(2), pages 189-209, May.
    8. Starkie, David & Starrs, Margaret, 1984. "Contestability and Sustainability in Regional Airline Markets," The Economic Record, The Economic Society of Australia, vol. 60(170), pages 274-83, September.
    9. Jan Brueckner & Ricardo Flores-Fillol, 2007. "Airline Schedule Competition," Review of Industrial Organization, Springer, vol. 30(3), pages 161-177, May.
    10. Oliveira, Alessandro V.M., 2008. "An empirical model of low-cost carrier entry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(4), pages 673-695, May.
    11. Flores-Fillol, Ricardo, 2009. "Airline competition and network structure," Transportation Research Part B: Methodological, Elsevier, vol. 43(10), pages 966-983, December.
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