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“What hurts the dominant airlines at hub airports?”

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  • Xavier Fageda

    (Faculty of Economics, University of Barcelona)

Abstract

This paper estimates a frequency equation to explain the determinants of network airline service levels at their hub airports. Drawing on European data for 2002-2013, we find that network airlines reduce frequencies when the share of low-cost airlines increases both on the route and at the hub airport. On the contrary, frequency choices of network airlines are not affected by competition from low-cost airlines operating in nearby secondary airports. We also find some evidence that mergers in Europe may result in a re-organization of the route structure in favor of the hubs of the larger airline.

Suggested Citation

  • Xavier Fageda, 2014. "“What hurts the dominant airlines at hub airports?”," IREA Working Papers 201414, University of Barcelona, Research Institute of Applied Economics, revised May 2014.
  • Handle: RePEc:ira:wpaper:201414
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    File URL: http://www.ub.edu/irea/working_papers/2014/201414.pdf
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    References listed on IDEAS

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    Cited by:

    1. Bettini, Humberto F.A.J. & Silveira, José Maria F.J. & Oliveira, Alessandro V.M., 2018. "Estimating strategic responses to the march of a low cost carrier to primary airports," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 109(C), pages 190-204.
    2. Fageda, Xavier & Flores-Fillol, Ricardo, 2016. "How do airlines react to airport congestion? The role of networks," Regional Science and Urban Economics, Elsevier, vol. 56(C), pages 73-81.
    3. Ivana Tománková, . "Determinants of Route Presence in the EU Airline Industry," Prague Economic Papers, University of Economics, Prague, vol. 0, pages 1-13.
    4. Calzada, Joan & Fageda, Xavier & Safronov, Roman, 2022. "How do global airline alliances affect flight frequency? Evidence from Russia," Journal of Air Transport Management, Elsevier, vol. 98(C).
    5. Bernardo, Valeria & Fageda, Xavier, 2017. "The effects of the Morocco-European Union open skies agreement: A difference-in-differences analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 98(C), pages 24-41.
    6. Fageda, Xavier & Jiménez, Juan Luis & Perdiguero, Jordi & Marrero, Kevin, 2017. "Does market exit of a network airline affect airline prices and frequencies on tourist routes?," Tourism Management, Elsevier, vol. 61(C), pages 465-471.
    7. Bernardo, Valeria & Fageda, Xavier, 2020. "Impacts of competition on connecting travelers: Evidence from the transatlantic aviation market," Transport Policy, Elsevier, vol. 96(C), pages 141-151.
    8. Ivana Tománková, 2017. "Determinants of Route Presence in the EU Airline Industry," Prague Economic Papers, Prague University of Economics and Business, vol. 2017(1), pages 90-102.

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    Keywords

    hub airports; competition; network airlines; low-cost airlines JEL classification:;
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