Complementary vs Semi-Complementary Airline Partnerships

18 Pages Posted: 3 Nov 2005

Date Written: October 2005

Abstract

As low-cost airlines or carriers excluded from international markets by regulation may seek to expand internationally in an indirect way through code-sharing agreements, they can choose partner airlines from among domestic or international carriers. The former case results in a semi-complementary partnership, while in the latter a classic complementary alliance is formed. This paper compares welfare properties of the two types of partnerships under economies of traffic density. Semi-complementary partnerships yield higher total welfare (but not necessarily lower prices) when economies of traffic density are strong, demand is more price-sensitive, or where a carrier feeding domestic traffic to international routes is a lower-cost one.

Keywords: Code-sharing, airline alliances, complementary alliances, low-cost airlines

JEL Classification: D43, D49, L13, L29, L40, L93

Suggested Citation

Bilotkach, Volodymyr, Complementary vs Semi-Complementary Airline Partnerships (October 2005). Available at SSRN: https://ssrn.com/abstract=833465 or http://dx.doi.org/10.2139/ssrn.833465

Volodymyr Bilotkach (Contact Author)

Newcastle Business School ( email )

208, City Campus East-1
Newcastle upon-Tyne, NE1 8ST
United Kingdom

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