Code-sharing and its effect on airline fares and welfare

Achim Ingo Czerny ()
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Achim Ingo Czerny: Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin

No 2006-15, Working Papers from Center for Network Industries and Infrastructure (CNI)

Abstract: Airlines frequently use code-share agreements allowing them to market seats on flights operated by partner airlines. Current studies argue that with complementary networks this generates positive welfare effects because fares for interline passengers who rely on the service of multiple airlines are supposed to fall. However, with codeshare agreements airlines can price discriminate between interline and other passengers. This might harm the latter which has been ignored so far. We show that code-share agreements can lead to welfare losses in the case of complementary networks.

Keywords: Airlines; alliances; code-share agreements; antitrust immunity; price discrimination (search for similar items in EconPapers)
JEL-codes: D01 L13 L41 L51 L93 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2006
New Economics Papers: this item is included in nep-com, nep-mic and nep-net
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