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.
|Number of pages||18|
|Journal||Journal of Transport Economics and Policy|
|Publication status||Published - 1 May 2009|
ASJC Scopus subject areas
- Economics and Econometrics
- Management, Monitoring, Policy and Law