Carve-outs under airline antitrust immunity

Arbeitspapier

This paper offers the first formal economic analysis of carve-outs under airline antitrust im- munity. Carve-outs are designed to limit the potential anticompetitive effects of cooperation by alliance partners in hub-to-hub markets, where they provide overlapping nonstop service. While the paper shows that carve-outs are beneficial when the alliance does not involve full integration of the partners' operations on the hub-to-hub route, its key point is that a carve-out may be harmful when imposed on a joint-venture alliance. A JV alliance involves full exploitation of economies of traffic density on the hub-to-hub route, and a carve-out prevents the realization of these benefits. While a carve-out may limit anticompetitive incentives on the hub-to-hub route, welfare may be reduced if the resulting gains are overshadowed by the efficiency loss generated by the carve-out.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2848

Classification and Topics

• Classification: Wirtschaft ; Antitrust Issues and Policies: General
• Subject: carve-out ; alliance ; antitrust immunity ; airlines ; Luftverkehrsgesellschaft ; Strategische Allianz ; Internationale Unternehmenskooperation ; Konzentrationspolitik ; Luftverkehr ; Hub-and-Spoke System ; Unternehmensentflechtung ; Wohlfahrtseffekt ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Brueckner, Jan Keith ; Proost, Stef
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/30476
• Last update: 10.03.2025, 11:44 AM CET