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Triggering competition in the Spanish airline market: The role of airport capacity and low-cost carriers

Xavier Fageda and Fernández-Villadangos, Laura

Journal of Air Transport Management, 2009, vol. 15, issue 1, 36-40

Abstract: We analyze the influence of increases in airport capacity and the entry of low-cost carriers on airline competition. We use parametric and non-parametric techniques to analyze a sample of Spanish routes. We find that capacity increases in large airports produce more competitive airline conduct only in routes departing from non-hub airports. Also, we find that the natural monopoly threshold decreases with time. Finally, low-cost carriers have a moderate but still significant effect on prices and increase alternatives even in low-density routes.

Keywords: Airline competition; Airport capacity; Low-cost carriers; Econometric analysis (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1016/j.jairtraman.2008.07.002

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Handle: RePEc:eee:jaitra:v:15:y:2009:i:1:p:36-40