Market concentration in German air transport before and after the Air Berlin bankruptcy

Tobias Grosche, Richard Klophaus and Adam Seredyński

Transport Policy, 2020, vol. 94, issue C, 78-88

Abstract: Market concentration in the airline industry, its measurement, causes, and consequences, has been a long-standing issue with airline representatives, public authorities, interest groups, and academics alike. This paper extends research on assessing market concentration in the airline industry by incorporating high-speed rail (HSR) services and connecting flights as travel alternatives to nonstop flights. Our methodology includes a connection builder calibrated with booking data, a Quality of Service Index (QSI) model for quality-weighting of travel alternatives, and the Herfindahl-Hirschman Index (HHI). We calculate HHI for origin and destination (O&D) city pairs originating in Germany on route and city level and provide aggregate metrics for all directional O&Ds worldwide ex Germany and across different destination categories applying a gravity model for size-weighting of O&Ds. Our findings support concerns about Lufthansa Group becoming more dominant in the German air transport market after the collapse of Air Berlin.

Keywords: Market concentration measurement; Airline industry; Herfindahl-Hirschman index (HHI); Quality of service index (QSI) (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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DOI: 10.1016/j.tranpol.2020.05.006

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