Strategic Formation of Airline Alliances

Ricardo Flores-Fillol and Rafael Moner-Colonques

Journal of Transport Economics and Policy, 2007, vol. 41, issue 3, 427-449

Abstract: This paper looks at the endogenous formation of airline alliances by means of a two-stage game where first airlines decide whether to form an alliance and then fares are determined. The authors analyse the effects and the strategic formation of airline alliances when two complementary alliances, following different paths, may be formed to serve a certain city-pair market. Alliances hurt rivals and decrease interline fares. Most interestingly, and contrary to what might be expected, the formation of alliances may be unprofitable in a competitive context. This is likely to happen when competition is significant and economies of traffic density are low. © 2007 LSE and the University of Bath

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (56)

Downloads: (external link)
http://www.catchword.com/cgi-bin/cgi?ini=bc&body=l ... 0070901)41:3L.427;1- (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpe:jtecpo:v:41:y:2007:i:3:p:427-449

Access Statistics for this article

Journal of Transport Economics and Policy is currently edited by B T Bayliss, S A Morrison, A Smith and D Graham

More articles in Journal of Transport Economics and Policy from University of Bath
Bibliographic data for series maintained by Christopher F. Baum (baum@bc.edu).