Code-sharing, price discrimination and welfare losses

Research output: Journal article publicationJournal articleAcademic researchpeer-review

20 Citations (Scopus)

Abstract

Airlines frequently use code-share agreements allowing each other to market seats on flights operated by partner airlines. Regulation may allow code-share agreements with antitrust immunity (cooperative price setting), or without antitrust immunity, or not at all. I compare the relative welfare effects of these regulation regimes on complementary airline networks. A crucial point is that such agreements are used to identify and pricediscriminate interline passengers. I find that interline passengers always benefit from code-share agreements while non-interline passengers are worse off. Furthermore, I show that the latter effect questions the overall usefulness of code-share agreements from a welfare perspective.
Original languageEnglish
Pages (from-to)193-210
Number of pages18
JournalJournal of Transport Economics and Policy
Volume43
Issue number2
Publication statusPublished - 1 May 2009
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics
  • Transportation
  • Management, Monitoring, Policy and Law

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