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Coalitions in the airline industry: an empirical approach

Author

Listed:
  • David Bartolini

    () (Department of Economics, Università Politecnica delle Marche.)

  • Alberto Gaggero

    () (Department of Economics, University of Pavia)

Abstract

This paper conducts an empirical analysis of the determinants of airline alliances. Well established airlines with large passengers' volumes are more likely to participate in an alliance and are also essential for alliance survivability. In line with this finding, older air-lines have a higher probability of being part of an alliance. Airlines operating with high load factors consider alliance participation as a significant alternative to fleet capacity expansion. As their market share grows, alliances become more appealing to airlines. Competitors' decision to enter an alliance tends to have a positive impact on alliance participation. The relatively similar magnitude and effect of the regressors' coefficients across different alliance choices, suggests that the airline's major decision is not to choose a specific alliance, but rather considering whether to enter into an alliance, as a possible strategy within its business model.

Suggested Citation

  • David Bartolini & Alberto Gaggero, 2012. "Coalitions in the airline industry: an empirical approach," Quaderni di Dipartimento 165, University of Pavia, Department of Economics and Quantitative Methods.
  • Handle: RePEc:pav:wpaper:165
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    Cited by:

    1. Alderighi, Marco & Gaggero, Alberto A. & Piga, Claudio A., 2015. "The effect of code-share agreements on the temporal profile of airline fares," Transportation Research Part A: Policy and Practice, Elsevier, vol. 79(C), pages 42-54.
    2. repec:eee:transe:v:116:y:2018:i:c:p:90-101 is not listed on IDEAS
    3. Alderighi, Marco & Gaggero, Alberto A., 2014. "The effects of global alliances on international flight frequencies: Some evidence from Italy," Journal of Air Transport Management, Elsevier, vol. 39(C), pages 30-33.
    4. repec:kap:revind:v:54:y:2019:i:1:d:10.1007_s11151-018-9636-x is not listed on IDEAS
    5. Marco Alderighi, 2013. "Air accessibility and the export of Italian manufacture in Europe: Evidence at regional level," ERSA conference papers ersa13p1304, European Regional Science Association.
    6. repec:eee:jaitra:v:67:y:2018:i:c:p:134-145 is not listed on IDEAS
    7. repec:eee:jotrge:v:71:y:2018:i:c:p:182-197 is not listed on IDEAS

    More about this item

    Keywords

    Discrete choice model; Oneworld; Sky Team; Star Alliance.;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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