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Carrier collaboration with endogenous fleets and load factors when networks are complementary

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  • Czerny, Achim I.
  • van den Berg, Vincent A.C.
  • Verhoef, Erik T.

Abstract

This paper analyzes the effect of carrier collaboration on fleet capacity, fleet structures in terms of the number and the size of vehicles, and load factors. The model features complementary networks, scheduling, price elastic demands, and demand uncertainty. For the case of a given number of vehicles, the analysis shows that carrier collaboration increases vehicle sizes (thus, fleet capacity) if marginal seat costs are low while fleet capacity remains unchanged if marginal seat costs are high. If both vehicle sizes and vehicle numbers can be varied, then collaboration will always increase vehicle numbers and fleet capacity, while the effects on vehicle sizes and, thus, also load factors, are ambiguous and therewith hard to predict. Numerical simulations indicate that collaboration increases expected load factors also when the number of vehicles is endogenous.

Suggested Citation

  • Czerny, Achim I. & van den Berg, Vincent A.C. & Verhoef, Erik T., 2016. "Carrier collaboration with endogenous fleets and load factors when networks are complementary," Transportation Research Part B: Methodological, Elsevier, vol. 94(C), pages 285-297.
    • Handle: RePEc:eee:transb:v:94:y:2016:i:c:p:285-297
    DOI: 10.1016/j.trb.2016.09.005
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    6. Daniel Rijken & Vincent (V.A.C.) van den Berg, 2017. "The Impact of Airline Mergers on Quality: Why Do Different Mergers Have Such Different Effects?," Tinbergen Institute Discussion Papers 17-079/VIII, Tinbergen Institute.
    7. Calzada, Joan & Fageda, Xavier & Safronov, Roman, 2022. "How do global airline alliances affect flight frequency? Evidence from Russia," Journal of Air Transport Management, Elsevier, vol. 98(C).
    8. Brueckner, Jan K. & Flores-Fillol, Ricardo, 2020. "Market structure and quality determination for complementary products: Alliances and service quality in the airline industry," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    9. van den Berg, Vincent A.C. & Meurs, Henk & Verhoef, Erik T., 2022. "Business models for Mobility as an Service (MaaS)," Transportation Research Part B: Methodological, Elsevier, vol. 157(C), pages 203-229.
    10. Jan K. Brueckner & Ricardo Flores-Fillol, 2018. "Airline Alliances and Service Quality," CESifo Working Paper Series 7226, CESifo.
    11. Lang, Hao & Czerny, Achim I., 2022. "Airport pricing versus (grandfathered) slots: A generalization," Economics of Transportation, Elsevier, vol. 29(C).
    12. Chen, Yilin & Hou, Meng & Wang, Kun & Yang, Hangjun, 2023. "Government interventions in regional airline markets based on aircraft size—Welfare and environmental implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 169(C).
    13. Vincent A.C. van den Berg & Henk Meurs & Erik T. Verhoef, 2020. "Business models for interoperable mobility services," Tinbergen Institute Discussion Papers 20-051/VIII, Tinbergen Institute, revised 05 Apr 2021.
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    15. Czerny, Achim I. & Cowan, Simon & Zhang, Anming, 2017. "How to mix per-flight and per-passenger based airport charges: The oligopoly case," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 483-500.

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