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Triggering competition in the Spanish airline market: The role of airport capacity and low-cost carriers

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  • Fageda, Xavier
  • Fernández-Villadangos, Laura

Abstract

We analyze the influence of increases in airport capacity and the entry of low-cost carriers on airline competition. We use parametric and non-parametric techniques to analyze a sample of Spanish routes. We find that capacity increases in large airports produce more competitive airline conduct only in routes departing from non-hub airports. Also, we find that the natural monopoly threshold decreases with time. Finally, low-cost carriers have a moderate but still significant effect on prices and increase alternatives even in low-density routes.

Suggested Citation

  • Fageda, Xavier & Fernández-Villadangos, Laura, 2009. "Triggering competition in the Spanish airline market: The role of airport capacity and low-cost carriers," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 36-40.
    • Handle: RePEc:eee:jaitra:v:15:y:2009:i:1:p:36-40
    DOI: 10.1016/j.jairtraman.2008.07.002
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