Airline alliances, antitrust immunity and market foreclosure

Volodymyr Bilotkach and Kai Hüschelrath
Authors registered in the RePEc Author Service: Kai Hueschelrath

No 10-083, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This paper examines the issue of market foreclosure by airline partnerships with antitrust immunity. Overlapping the data on frequency of service and passenger volumes on nonstop routes on the transatlantic airline market with the information on dynamics of airline partnerships, we find evidence consistent with the airlines operating under antitrust immunity refusing to accept connecting passengers from the carriers outside of the partnership at respective hub airports. When an airline partnership is granted antitrust immunity, airlines outside this partnership end up reducing their traffic to the partner airlines' hub airports by 2.6-8.5 percent (depending on the specification and estimation technique involved). Our results suggest ambiguous welfare effects of antitrust immunity on some markets, where previous studies indicated airline consolidation should benefit consumers.

Keywords: air transportation; alliances; antitrust immunity; foreclosure (search for similar items in EconPapers)
JEL-codes: K21 L41 L93 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-com and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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https://www.econstor.eu/bitstream/10419/42227/1/640255175.pdf (application/pdf)

Related works:
Journal Article: Airline Alliances, Antitrust Immunity, and Market Foreclosure (2013)
Working Paper: Airline alliances, antitrust immunity and market foreclosure (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:10083

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