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Price competition of airports and its effect on the airline network

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  • Teraji, Yusuke
  • Morimoto, Yu

Abstract

This paper deals with the price competition between airports and its effect on airline (carrier) networks. We construct a model that includes the following two features: (i) the carrier can choose its network configuration (point-to-point or hub-spoke) and (ii) airport operators can compete for airport charges by considering the carrier׳s choice. By utilizing this model, we address the question of how airport competition affects the carrier׳s network choice. The results show that the price competition of airports forces the carrier to choose an airport at a relatively small city as the network hub. Furthermore, the private operation of airports disturbs the formation of a hub-spoke network.

Suggested Citation

  • Teraji, Yusuke & Morimoto, Yu, 2014. "Price competition of airports and its effect on the airline network," Economics of Transportation, Elsevier, vol. 3(1), pages 45-57.
    • Handle: RePEc:eee:ecotra:v:3:y:2014:i:1:p:45-57
    DOI: 10.1016/j.ecotra.2014.03.001
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    References listed on IDEAS

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    Cited by:

    1. Adler, Nicole & Brudner, Amir & Gallotti, Riccardo & Privitera, Filippo & Ramasco, José J., 2022. "Does big data help answer big questions? The case of airport catchment areas & competition," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 444-467.
    2. Yu Morimoto∗, 2019. "Demand Leakage from a Local Small Airport to a Regional Main Airport," International Journal of Humanities, Arts and Social Sciences, Dr. Mohammad Hamad Al-khresheh, vol. 5(1), pages 36-42.
    3. Xu, Fangzhou & Hanaoka, Shinya, 2021. "Effects of airport terminal competition: A vertical structure approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).

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