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The Home Carrier Advantage in Civil Aviation

Author

Listed:
  • Mark Lijesen

    (Netherlands Bureau for Economic Policy Analysis (CPB))

  • Peter Nijkamp

    (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

  • Eric Pels

    (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

Abstract

This paper analyzes the relative economic power position of home carriers in hub-and-spoke systems. Hub-and-spoke systems may lower costs on densely traveled routes and enable economically viable operations on less densely traveled routes. The reverse side is probably that carriers enjoy significant market power at their home base, often labeled the home carrier advantage. The paper offers a concise overview of the literature in this field, and addresses next empirically this issue for European home carriers. We found empirically that at least some European carriers charge premiums for flights originating from their hubs. The hub premiums of Lufthansa, Swissair and Air France are significantly higher than those of the other companies in our sample.

Suggested Citation

  • Mark Lijesen & Peter Nijkamp & Eric Pels, 2005. "The Home Carrier Advantage in Civil Aviation," Tinbergen Institute Discussion Papers 05-011/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20050011
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    File URL: https://papers.tinbergen.nl/05011.pdf
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    Cited by:

    1. Tolcha, Tassew Dufera & Bråthen, Svein & Holmgren, Johan, 2020. "Air transport demand and economic development in sub-Saharan Africa: Direction of causality," Journal of Transport Geography, Elsevier, vol. 86(C).

    More about this item

    Keywords

    Airlines; airports; networks; homecarrier advantage;
    All these keywords.

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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