Code-sharing, Price Discrimination and Welfare Losses

Achim I. Czerny

Journal of Transport Economics and Policy, 2009, vol. 43, issue 2, 193-212

Abstract: Airlines frequently use code-share agreements allowing each other to market seats on flights operated by partner airlines. Regulation may allow code-share agreements with antitrust immunity (cooperative price setting), or without antitrust immunity, or not at all. I compare the relative welfare effects of these regulation regimes on complementary airline networks. A crucial point is that such agreements are used to identify and price-discriminate interline passengers. I find that interline passengers always benefit from code-share agreements while non-interline passengers are worse off. Furthermore, I show that the latter effect questions the overall usefulness of code-share agreements from a welfare perspective. © 2009 LSE and the University of Bath

Date: 2009
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Citations: View citations in EconPapers (21)

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