Joint Ventures in the Transatlantic Airline Market

Xavier Fageda, Ricardo Flores-Fillol and Bernd Theilen ()

A chapter in Airline Economics in Europe, 2019, vol. 8, pp 117-136 from Emerald Group Publishing Limited

Abstract: This study investigates, both theoretically and empirically, the effects of joint ventures on traffic. Although alliances are a pre-condition for joint ventures, both cooperation agreements are different in their nature. The reason is that alliances are revenue-sharing agreements, whereas joint ventures also involve a cost-sharing commitment. Our empirical analysis focuses on the transatlantic market, including non-stop routings (interhub markets) and one-stopover routings (interline markets). Our theoretical and empirical findings emphasize the relevance of economies of traffic density and reveal a positive effect of joint ventures on traffic, both in interhub and interline markets.

Keywords: Alliances; joint ventures; interhub markets; interline markets; economies of traffic density; transatlantic market (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:aiaezz:s2212-160920190000008006

DOI: 10.1108/S2212-160920190000008006

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