Competitive responses of an established airline to the entry of a low-cost carrier into its hub airports

Ruowei Chen

Journal of Air Transport Management, 2017, vol. 64, issue PB, 113-120

Abstract: This paper investigates the competitive responses of China Eastern to the entry of Spring Airlines into its hub airports in Shanghai. The analysis takes into account of the actual and adjacent competition for both LCCs and full-service airlines (FSAs) within an airport-pair framework. The results of the econometric analysis showed that Spring put downward pressure on the average fares of China Eastern and other FSAs. But China Eastern responded more aggressively than other FSAs to Spring's competition on routes from the same and nearby airports. Having said that, the moderate price reduction of 4%–4.9% suggests that China Eastern did not perceive Spring as a serious competitor. Such limited impacts are due to restrictions imposed by the regulator onto Spring Airlines in terms of capacity control and access to major trunk routes.

Keywords: Low-cost carriers; Airline competition; Spring airlines; China Eastern; China (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0969699716302885
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:64:y:2017:i:pb:p:113-120

DOI: 10.1016/j.jairtraman.2016.07.015

Access Statistics for this article

Journal of Air Transport Management is currently edited by Anne Graham

More articles in Journal of Air Transport Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().