Explaining changes and trends in the airline industry: Economies of density, multiproduct scale, and spatial scope

Sergio Jara-Diaz (), Cristián E. Cortés and Gabriela A. Morales

Transportation Research Part E: Logistics and Transportation Review, 2013, vol. 60, issue C, 13-26

Abstract: Changes in the shape and size of airline networks have not been explained clearly from a cost perspective based on the finding of increasing returns to density for given route structures and constant returns to scale for variable network size. We reassessed the estimates of these economies by using new scale and scope indices, finding savings due to changes in route structures and various types of economies of spatial scope not previously calculated: network size, trunk-local services and domestic-international services. Results contribute new insights on the role of cost incentives in the observed changes and trends in the airline industry.

Keywords: Air transport; Network size and shape; Route structure; Scale economies; Spatial scope (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.tre.2013.09.003

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