DOES AIRLINE COMPETITION WORK IN SHORT-HAUL MARKETS?
Industrial Organization from EconWPA
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.
Keywords: Air Transportation; Multiple Equation Models; Oligopoly. (search for similar items in EconPapers)
JEL-codes: L (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-cse, nep-mic and nep-net
Note: Type of Document - pdf; pages: 31
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpio:0511010
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