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Coalitions in the airline industry: an empirical approach

David Bartolini (dbartolini@imf.org) and Alberto Gaggero

No 165, Quaderni di Dipartimento from University of Pavia, Department of Economics and Quantitative Methods

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.

Keywords: Discrete choice model; Oneworld; Sky Team; Star Alliance. (search for similar items in EconPapers)
JEL-codes: C23 L10 L93 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2012-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-hme and nep-tre
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http://dem-web.unipv.it/web/docs/dipeco/quad/ps/RePEc/pav/wpaper/q165.pdf (application/pdf)

Related works:
Journal Article: The Determinants of Airline Alliances (2012) Downloads
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