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Airline passenger traffic openness and the performance of Emirates Airline

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  • Squalli, Jay

Abstract

This paper uses cross-sectional data for 155 routes connecting Dubai to various international destinations to assess the relationship between air travel openness, representing airline agreements and the framework governing airlines, and the economic performance of Emirates Airline. We find that increased openness is associated with higher enplanement and lower fares. We also find that code-sharing agreements are associated with higher enplanement and higher fares. Given the complementary nature of such agreements for Emirates, this suggests potential collusive behavior. While these findings are specific to Emirates, they are regionally relevant as most carriers in the Gulf operate in an environment that is similar to Emirates's. Thus, further liberalization of the passenger airline markets of UAE and other Gulf carriers – which includes the elimination of code-sharing-related collusive agreements – would likely result in increased expenditure on air travel and lower production costs (from ensuing competitive pressures). Such outcomes can potentially yield net welfare gains for the UAE and other Gulf countries.

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  • Squalli, Jay, 2014. "Airline passenger traffic openness and the performance of Emirates Airline," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(1), pages 138-145.
  • Handle: RePEc:eee:quaeco:v:54:y:2014:i:1:p:138-145
    DOI: 10.1016/j.qref.2013.07.010
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    References listed on IDEAS

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    1. Lieshout, Rogier & Malighetti, Paolo & Redondi, Renato & Burghouwt, Guillaume, 2016. "The competitive landscape of air transport in Europe," Journal of Transport Geography, Elsevier, vol. 50(C), pages 68-82.
    2. Bedford, James & Bilotkach, Volodymyr, 2022. "Competition on the UK-Australasia market: Evidence from transaction data," Transport Policy, Elsevier, vol. 122(C), pages 54-63.
    3. Dresner, Martin & Eroglu, Cuneyt & Hofer, Christian & Mendez, Fabio & Tan, Kerry, 2015. "The impact of Gulf carrier competition on U.S. airlines," Transportation Research Part A: Policy and Practice, Elsevier, vol. 79(C), pages 31-41.
    4. Grosche, Tobias & Klophaus, Richard & Seredyński, Adam, 2017. "Competition for long-haul connecting traffic among airports in Europe and the Middle East," Journal of Air Transport Management, Elsevier, vol. 64(PA), pages 3-14.
    5. Chaikal Nuryakin & Regi Kusumaatmadja & Natanael Waraney Gerald Massie & Alvin Ulido Lumbanraja & Sean Hambali & Devina Anindita, 2019. "The Sky in Blues: On the Recent Development of Indonesian Airlines Industry," LPEM FEBUI Working Papers 201941, LPEM, Faculty of Economics and Business, University of Indonesia, revised 2019.

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