Vertical Governance between Airlines and Airports – A Transaction Cost Analysis

Johannes Fuhr () and Thorsten Beckers ()
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Thorsten Beckers: Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin

No 2006-04, Working Papers from Center for Network Industries and Infrastructure (CNI)

Abstract: With airport privatization and infrastructure expansion projects taking place in the liberalized European air transport market, airport and airline companies are critically reevaluating their vertical governance structures. This paper analyzes the comparative efficiency of vertical governance structures in the airport-airline supply relationship. Using transaction cost economics as the lens of analysis, we develop propositions and present supporting qualitative case studies. Our propositions state that hub airlines and hub airports seek specialized governance structures, while value-based carriers and base airports enter into long-term contracts supported by complementary safeguards. These privately crafted governance modes complement or even replace external regulation.

Keywords: vertical integration; transaction cost; airlines; airports; competition (search for similar items in EconPapers)
JEL-codes: D23 L22 L93 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2006
New Economics Papers: this item is included in nep-com and nep-reg
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Published in Review of Network Economics, 2006, Vol 5, Issue 4, p. 386-412

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Journal Article: Vertical Governance between Airlines and Airports - A Transaction Cost Analysis (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:cni:wpaper:2006-04

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