Airport and Airline Competition for Passengers Departing from a Large Metropolitan Area

Posted: 26 Jul 2000

See all articles by Piet Rietveld

Piet Rietveld

VU University Amsterdam - Department of Spatial Economics (Deceased)

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics; Tinbergen Institute

Eric A. J. H. Pels

Vrije Universiteit - Department of Spatial Economic

Abstract

In this paper an airport and airline choice model, based on a nested multinomial logit model, is developed to investigate both airport competition and airline competition in a metropolitan area with multiple departure airports. The model can be used to analyze the effects of, e.g., an improvement in accessibility of a specific airport in a metropolitan area. It is shown analytically that if the frequency elasticity of demand is smaller than 1, unique airfare-frequency and passenger-charge equilibria exist. Next, symmetric equilibria are derived analytically; their properties are also examined. Finally, asymmetric equilibria are derived numerically, while their properties are discussed as well.

Keywords: airport competition; airline competition; discrete choice model

JEL Classification: L93

Suggested Citation

Rietveld, Piet and Nijkamp, Peter and Pels, Eric A.J.H., Airport and Airline Competition for Passengers Departing from a Large Metropolitan Area. Available at SSRN: https://ssrn.com/abstract=232644

Piet Rietveld

VU University Amsterdam - Department of Spatial Economics (Deceased)

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 4446097 (Phone)
+31 20 4446004 (Fax)

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 4446091 (Phone)
+31 20 4445611 (Fax)

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Eric A.J.H. Pels (Contact Author)

Vrije Universiteit - Department of Spatial Economic ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31-20-4446049 (Phone)
+31-20-4446004 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
1,289
PlumX Metrics