Abstract
This paper examines the forms and effects of vertical relationships between airports and airlines with a focus on the North American and European aviation markets. We find that such vertical relationships enables those participating to achieve various benefits and may be formed as a competitive response to other competing airport-airline alliances. In some cases, vertical airport-airline relationships strengthen the hub status of major airports, leading to increased employment and service quality in local markets. On the other hand, preferential treatment of a particular airline by an airport may enhance that airline's market power, allowing it to dominate the airport and charge hub premiums. The competition and welfare implications of airport-airline vertical alliances can be complicated and two-sided, subject to the influences of other factors such as the market structures of the airline and airport markets.
Original language | English |
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Pages (from-to) | 347-353 |
Number of pages | 7 |
Journal | Journal of Air Transport Management |
Volume | 17 |
Issue number | 6 |
DOIs | |
Publication status | Published - 1 Jan 2011 |
Keywords
- Airport economics
- Airport-airline relationship
- Vertical cooperation
ASJC Scopus subject areas
- Transportation
- Strategy and Management
- Management, Monitoring, Policy and Law
- Law