Abstract

http://ssrn.com/abstract=1798298
 


 



Airline Alliances with Low Cost Carriers


Tomohiko Kawamori


Osaka University of Economics - Faculty of Economics

Ming Hsin Lin


Osaka University of Economics - Faculty of Economics

March 24, 2011


Abstract:     
A major carrier operates one hub linking multiple non-hub cities. It forms an alliance with a low cost carrier whose nonstop service competes with its one-stop service. The alliance’s joint profit is maximized by withdrawing the competing one-stop (nonstop) service when the major carrier’s operating cost and connecting passengers’ hub-through additional time costs are large (small). The realized alliance is welfare-improving (welfare-decreasing) when these costs are large or small (intermediate). These findings suggest the necessity of alliance regulation. In some regions, the necessity of regulation does not monotonically change as the network size increases.

Number of Pages in PDF File: 30

Keywords: Codeshare alliances, Hub-spoke network carriers, Low cost carriers, Antitrust immunity, Schedule competition

JEL Classification: L13, L93

working papers series


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Date posted: March 30, 2011  

Suggested Citation

Kawamori, Tomohiko and Lin, Ming Hsin, Airline Alliances with Low Cost Carriers (March 24, 2011). Available at SSRN: http://ssrn.com/abstract=1798298 or http://dx.doi.org/10.2139/ssrn.1798298

Contact Information

Tomohiko Kawamori
Osaka University of Economics - Faculty of Economics ( email )
2-2-8 Osumi
Higashiyokogawa-ku
Osaka, 533-8533
Japan
Ming Hsin Lin (Contact Author)
Osaka University of Economics - Faculty of Economics ( email )
2-2-8 Osumi
Higashiyokogawa-ku
Osaka
Japan
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