Airline Deregulation and the Choice of Networks

Joseph Berechman and Oz Shy

No 275503, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: /n this paper, we explore how incumbent airline firms restructure their route network in order to deter entry caused by deregulation. We demonstrate that under the threat of entry, following market deregulation, incumbent airline firms are more likely to operate hub-and-spoke type networks. In doing so, the firms will increase the frequency of service compared with a fully-connected type network case. Consequently, consumers' welfare will rise with deregulation.

Keywords: Financial Economics; Public Economics (search for similar items in EconPapers)
Pages: 25
Date: 1991-06
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Working Paper: Airline Deregulation and the Choice of Networks (1991)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275503

DOI: 10.22004/ag.econ.275503

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