Moroccan Passenger Airlines Framework and Performance

Brahim Morchid and Khalid Sekkat

No 725, Working Papers from Economic Research Forum

Abstract: This paper studies the relationship between the current passengers’ airlines framework and the performance of the sector in Morocco. The analysis aims at investigating the impact of further liberalization on passengers and on airline industry. The paper has two additional contributions to the existing literature. First, it addresses the issue at the route level. Second, it constructs an Openness Index (OI) that should reflect the degree of openness on each route. The analysis sets up an economic model of air transport, computes the indicator of openness, estimates the model incorporating the indicator and other determinants and uses the estimation results to simulate the impact of further liberalization on passengers and on welfare. The result of the OI computation shows that routes linking the main airport (i.e. Casablanca) are the least open to competition while Agadir and Marrakech are the most open. All routes became more open between 2000 and 2010. The econometric and simulation results show that further liberalization would increase the number of passengers to and from Morocco and decrease the average airfare. The net effect on society welfare is positive; the consumer surplus increase outweighs the producers’ surplus decrease. This conclusion is robust the various liberalization scenario.

Pages: 30
Date: 2012, Revised 2012
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Citations: View citations in EconPapers (2)

Published by The Economic Research Forum (ERF)

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