Abstract

http://ssrn.com/abstract=1160299
 
 

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The Industrial Organization of Air Transport in Chile (La Organizacion Industrial del Transporte Aereo en Chile)


Claudio A. Agostini


Universidad Adolfo Ibañez

July 15, 2008

Revista de Analisis Economico, Vol. 23, No. 1, pp. 35-84, 2008

Abstract:     
Over the last 20 years, demand for air passenger transport has grown dramatically. At the same time, the two largest domestic airlines merged and several smaller entrants exited without being able to make significant inroads. As a result, the industry is highly concentrated, with a dominant firm and a few fringe firms. This condition has generated considerable public debate about the degree of competition in the airline industry in Chile. With the purpose of contributing to the public discussion, this paper analyzes the industry from an industrial organization point of view. Specifically, the paper describes the domestic airline industry in Chile, defines the relevant market and then analyzes both the degree of concentration and entry conditions. In particular, I focus on the roles played by vertical integration, the computer reservation systems and the revenue management practice. I then evaluate the airfares self-regulation scheme used by the dominant firm and propose several public policies to increase competition.

Note: Downloadable document is in Spanish.

Number of Pages in PDF File: 50

Keywords: Airlines, Competition, Fares Self-regulation

JEL Classification: L93, L11, L13

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Date posted: July 16, 2008 ; Last revised: February 8, 2010

Suggested Citation

Agostini, Claudio A., The Industrial Organization of Air Transport in Chile (La Organizacion Industrial del Transporte Aereo en Chile) (July 15, 2008). Revista de Analisis Economico, Vol. 23, No. 1, pp. 35-84, 2008. Available at SSRN: http://ssrn.com/abstract=1160299

Contact Information

Claudio A. Agostini (Contact Author)
Universidad Adolfo Ibañez ( email )
Diagonal Las Torres 2640
Santiago
Chile
(562)3311130 (Phone)
HOME PAGE: http://www.uai.cl/profesores/claudio-agostini
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