Scheduled service versus personal transportation: the role of distance

Volodymyr Bilotkach, Xavier Fageda and Ricardo Flores-Fillol ()

No XREAP2008-13, Working Papers from Xarxa de Referència en Economia Aplicada (XREAP)

Abstract: This paper analyzes both theoretically and empirically the relationship between distance and frequency of scheduled transportation services. We study the interaction between a monopoly firm providing high-speed scheduled service and personal trans- portation (i.e., car). Most interestingly, the carrier chooses to increase frequency of service on longer routes when competing with personal transportation because provid- ing a higher frequency (at extra cost) it can also charge higher fares that can boost its profits. However, when driving is not a relevant option, frequency of service de- creases for longer flights consistently with prior studies. An empirical application of our analysis to the European airline industry con?rms the predictions of our theoretical model.

Keywords: Short-haul routes; long-haul routes; flight frequency; distance (search for similar items in EconPapers)
JEL-codes: L13 L2 L93 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: Written
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http://www.pcb.ub.es/xreap/aplicacio/fitxers/XREAP2008-13.pdf First version, 2008 (application/pdf)
http://www.pcb.ub.es/xreap/aplicacio/fitxers/XREAP2008-13.pdf Revised version, 2008 (application/pdf)

Related works:
Working Paper: Scheduled service versus personal transportation: the role of distance (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:xrp:wpaper:xreap2008-13

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