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Complementary Alliances with Endogenous Fleets and Load Factors

Achim I. Czerny, Vincent van den Berg and Erik Verhoef ()
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Achim I. Czerny: Hong Kong Polytechnic University, Hong Kong, PR China

No 15-134/VIII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper analyzes the effect of carrier collaboration on fleet capacity, fleet structures in terms of the number and the size of vehicles, and load factors. The model features complementary networks, scheduling, price elastic demands, and demand uncertainty. For the case of a given number of vehicles, the analysis shows that carrier collaboration increases vehicle sizes (thus, fleet capacity) if marginal seat costs are low while fleet capacity remains unchanged if marginal seat costs are high. If both vehicle sizes and vehicle numbers can be varied, then collaboration will always increase vehicle numbers and fleet capacity, while the effects on vehicle sizes and, thus, also load factors, are ambiguous and therewith hard to predict. Numerical simulations indicate that collaboration increases expected load factors also when the number of vehicles is endogenous.

Keywords: Alliances; fleet capacity; load factors; scheduling; uncertainty (search for similar items in EconPapers)
JEL-codes: L40 L50 M21 R42 R49 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-com, nep-ene and nep-tre
Date: 2015-12-18
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20150134

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