Price Competition between International Airline Alliances
This paper develops a model of price competition between two international airline alliances, with consumers' preferences vertically differentiated by the number of stops. Alliances benefit the interline passengers. Alliances with antitrust immunity do not benefit interline passengers more than those without antitrust immunity, in contrast to the Cournot-type settings. While antitrust immunity leads to higher fares for non-stop travel between hubs of alliance partners, granting it might be necessary to induce consolidation between carriers. Formation of alliances with antitrust immunity is consistent with the proposed model, even though these are likely to decrease individual carriers' profit. © 2005 LSE and the University of Bath
Year of publication: |
2005
|
---|---|
Authors: | Bilotkach, Volodymyr |
Published in: |
Journal of Transport Economics and Policy. - London School of Economics and University of Bath, ISSN 0022-5258. - Vol. 39.2005, 2, p. 167-190
|
Publisher: |
London School of Economics and University of Bath |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Sensitivity of prices to demand shocks: A natural experiment in the San Francisco Bay Area
Bilotkach, Volodymyr, (2012)
-
The Construction of a Low‐Cost Airline Network – Facing Competition and Exploring New Markets
Müller, Kathrin, (2012)
-
Airline Alliances, Antitrust Immunity, and Market Foreclosure
Bilotkach, Volodymyr, (2013)
- More ...