The Home Carrier Advantage in Civil Aviation

Mark Lijesen (), Peter Nijkamp and Eric Pels ()
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Eric Pels: Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam

No 05-011/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper analyzes the relative economic power position of home carriers in hub-and-spoke systems. Hub-and-spoke systems may lower costs on densely traveled routes and enable economically viable operations on less densely traveled routes. The reverse side is probably that carriers enjoy significant market power at their home base, often labeled the home carrier advantage. The paper offers a concise overview of the literature in this field, and addresses next empirically this issue for European home carriers. We found empirically that at least some European carriers charge premiums for flights originating from their hubs. The hub premiums of Lufthansa, Swissair and Air France are significantly higher than those of the other companies in our sample.

Keywords: Airlines; airports; networks; homecarrier advantage (search for similar items in EconPapers)
JEL-codes: D4 R41 (search for similar items in EconPapers)
Date: 2005-01-21
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20050011

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