The effects of airline alliances: What do the aggregate data say?

Philippe Gagnepain () and Pedro Marin
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Philippe Gagnepain: Departamento de Economía - UC3M - Universidad Carlos III de Madrid [Madrid], CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
Pedro Marin: Departamento de Economía - UC3M - Universidad Carlos III de Madrid [Madrid]

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Abstract: We consider an empirical model of worldwide airline alliances that we apply to a large set of companies for the period 1995-2000. Using observations at the network level, we estimate a cost, capacity, and demand system that accounts for cross-price elasticities. Our contribution consists in evaluating airlines' strategical interactions through the window of firms' network interconnections. We consider networks coincidences and potential connections with all their rivals. The results allow us to classify all company pairs as either complements or substitutes. We shed light on the fact that many airlines involved in the same alliance are potential substitutes.

Date: 2010
Note: View the original document on HAL open archive server: https://hal.science/hal-00622831
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Published in SERIES Journal of the Spanish Economic Association, 2010, 1, pp.251-276

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00622831

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