Airline Route Structure Competition and Network Policy

Arbeitspapier

This paper studies whether a regulator needs to correct the route structure choice by carriers with market power in the presence of congestion externalities, in addition to correct their pricing. We account for passenger benefits from increased frequency, passenger connecting costs, airline endogenous hub location and route structure strategic competition. We find that, for some parameters, an instrument directly aimed at regulating route structure choice may be needed to maximize welfare, in addition to per-passenger and per-flight tolls designed to correct output inefficiencies. This holds true when the regulator is constrained to set non-negative tolls, but also for the case of unconstrained tolling.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 13-189/VIII

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Air Transportation
• Subject: Route structure competition ; Aviation policy ; Hub-and-spoke networks ; Fully-connected networks

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Silva, Hugo Emilo ; Verhoef, Erik T. ; van den Berg, Vincent
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/89231
• Last update: 10.03.2025, 11:42 AM CET