Airport–airline cooperation under commercial revenue sharing agreements: A network approach

Batari Saraswati and Shinya Hanaoka

Transportation Research Part E: Logistics and Transportation Review, 2014, vol. 70, issue C, 17-33

Abstract: This study analyzes airport–airline cooperation where an airport offers to share a proportion of its commercial revenue with airlines in exchange for a fixed payment. We observe the revenue share allocation that maximizes airport profit, subject to airline acceptance, and examine the effects of revenue sharing on downstream competition and social welfare. Methodologically, we employ multi-airport multi-airline non-cooperative games with a network model and find that an airport prefers to share revenue with its dominant airline in order to gain the optimal benefit.

Keywords: Airport–airline cooperation; Revenue share allocation; Game theory (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (16)

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DOI: 10.1016/j.tre.2014.06.013

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