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Contestability and Sustainability in Regional Airline Markets

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  • DAVID STARKIE
  • MARGARET STARRS

Abstract

Since 1979, entry into the varied South Australian air passenger market has been unrestricted. This paper analyzes what has happened during the last four years with particular reference to the theory of contestable markets. Analysis shows that new firms have entered the market, services have increased significantly, new routes have been developed and that there is no apparent difference in the structure of fares on multi‐firm and single‐firm (monopoly) routes.

Suggested Citation

  • David Starkie & Margaret Starrs, 1984. "Contestability and Sustainability in Regional Airline Markets," The Economic Record, The Economic Society of Australia, vol. 60(3), pages 274-283, September.
    • Handle: RePEc:bla:ecorec:v:60:y:1984:i:3:p:274-283
    DOI: 10.1111/j.1475-4932.1984.tb00862.x
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    References listed on IDEAS

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    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    2. Baumol, William J & Panzar, John C & Willig, Robert D, 1983. "Contestable Markets: An Uprising in the Theory of Industry Structure: Reply," American Economic Review, American Economic Association, vol. 73(3), pages 491-496, June.
    3. Bailey, Elizabeth E, 1981. "Contestability and the Design of Regulatory and Antitrust Policy," American Economic Review, American Economic Association, vol. 71(2), pages 178-183, May.
    4. Schwartz, Marius & Reynolds, Robert J, 1983. "Contestable Markets: An Uprising in the Theory of Industry Structure: Comment," American Economic Review, American Economic Association, vol. 73(3), pages 488-490, June.
    5. John C. Panzar & Robert D. Willig, 1977. "Free Entry and the Sustainability of Natural Monopoly," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 1-22, Spring.
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    Cited by:

    1. Francesco, Antonio Di & Pagliari, Romano, 2012. "The potential impact of removing public service obligation regulations on air fares between the Italian Mainland and the island of Sardinia," Journal of Transport Geography, Elsevier, vol. 24(C), pages 332-339.
    2. Gillen, David & Hazledine, Tim, 2015. "The economics and geography of regional airline services in six countries," Journal of Transport Geography, Elsevier, vol. 46(C), pages 129-136.
    3. Calzada, Joan & Fageda, Xavier, 2014. "Competition and public service obligations in European aviation markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 104-116.
    4. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "Air services on thin routes: Regional versus low-cost airlines," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 702-714.
    5. Joan Calzada & Xavier Fageda, 2012. "Discounts and Public Service Obligations in the Airline Market: Lessons from Spain," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(4), pages 291-312, June.
    6. Eugenio-Martin, Juan Luis & Perez-Granja, Ubay, 2022. "Quantifying the net impact and redistribution effects of airlines’ exits on passenger traffic," Journal of Air Transport Management, Elsevier, vol. 101(C).

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