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Does Airline Competition Work In Short-Haul Markets?

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  • Xavier Fageda

Abstract

In this paper, we analyze how an airline can take advantage of airport dominance of a whole network in a market characterized by short-haul routes and congestion. In order to tackle this issue, we estimate an equation system, which is based on theoretical grounds, for the Spanish domestic market. We find that costs and demand benefits of airport dominance have to do with providing a high flight frequency. Such benefits can damage seriously the effectiveness of competition as long as the competitive status of major airline’s rivals is threatened.

Suggested Citation

  • Xavier Fageda, 2005. "Does Airline Competition Work In Short-Haul Markets?," Industrial Organization 0511010, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpio:0511010
    Note: Type of Document - pdf; pages: 31
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/io/papers/0511/0511010.pdf
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    References listed on IDEAS

    as
    1. Marin, Pedro L., 1998. "Productivity differences in the airline industry: Partial deregulation versus short run protection," International Journal of Industrial Organization, Elsevier, vol. 16(4), pages 395-414, July.
    2. Hurdle, Gloria J, et al, 1989. "Concentration, Potential Entry, and Performance in the Airline Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 38(2), pages 119-139, December.
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    More about this item

    Keywords

    Air Transportation; Multiple Equation Models; Oligopoly.;
    All these keywords.

    JEL classification:

    • L - Industrial Organization

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