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How the presence of low-cost carrier competition scheduling differentiation

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  • Yetiskul, Emine
  • Kanafani, Adib

Abstract

This study explores the relation between airline market structure and schedule differentiation. Using a location theory framework applied to product differentiation over the time scale, the analysis relates the level of competition, and the presence of low-cost carriers in non-stop US markets to schedule clustering. As expected from theory, it is found that schedule clustering increases with competition, resulting in reduction in product differentiation. It is also found that this tendency is lower in the presence of low-cost carriers and when there is a strong hub effect where dominant hub airline own, rather than compete with their feeder subsidiaries.

Suggested Citation

  • Yetiskul, Emine & Kanafani, Adib, 2010. "How the presence of low-cost carrier competition scheduling differentiation," Journal of Air Transport Management, Elsevier, vol. 16(1), pages 7-11.
    • Handle: RePEc:eee:jaitra:v:16:y:2010:i:1:p:7-11
    DOI: 10.1016/j.jairtraman.2009.06.003
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    References listed on IDEAS

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    1. Borenstein, Severin & Netz, Janet, 1999. "Why do all the flights leave at 8 am?: Competition and departure-time differentiation in airline markets," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 611-640, July.
    2. de Palma, A, et al, 1985. "The Principle of Minimum Differentiation Holds under Sufficient Heterogeneity," Econometrica, Econometric Society, vol. 53(4), pages 767-781, July.
    3. repec:ulb:ulbeco:2013/1759 is not listed on IDEAS
    4. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    5. Janet S. Netz & Beck A. Taylor, 2002. "Maximum Or Minimum Differentiation? Location Patterns Of Retail Outlets," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 162-175, February.
    6. Salvanes, Kjell G. & Steen, Frode & Sorgard, Lars, 2005. "Hotelling in the air? Flight departures in Norway," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 193-213, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Sun, Joo Yeon, 2015. "Clustered airline flight scheduling: Evidence from airline deregulation in Korea," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 85-94.
    2. Valido, Jorge & Socorro, M. Pilar & Medda, Francesca, 2020. "Airport capacity and entry deterrence: Low cost versus full service airlines," Economics of Transportation, Elsevier, vol. 22(C).
    3. Zhihong Chen & Zhiqi Chen, 2014. "Product Line Rivalry and Firm Asymmetry," Journal of Industrial Economics, Wiley Blackwell, vol. 62(3), pages 417-435, September.
    4. Sun, Joo Yeon, 2020. "Airport curfew and scheduling differentiation: Domestic versus international competition," Journal of Air Transport Management, Elsevier, vol. 87(C).
    5. Cattaneo, Mattia & Malighetti, Paolo & Redondi, Renato & Salanti, Andrea, 2018. "Changes in frequencies and price variations on point-to-point routes: The case of easyJet," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 60-70.
    6. Jorge Valido & M. Pilar Socorro & Francesca Medda, 2013. "DYPES: Vertical differentiation, schedule delay and entry deterrence: Low cost vs. full service airlines," Working Papers 2013-05, FEDEA.

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