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Air services on thin routes: Regional versus low-cost airlines

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  • Fageda, Xavier
  • Flores-Fillol, Ricardo

Abstract

An examination of the impact in the US and EU markets of two major innovations in the provision of air services on thin routes - regional jet technology and the low-cost business model - reveals significant differences. In the US, regional airlines monopolize a high proportion of thin routes, whereas low-cost carriers are dominant on these routes in Europe. Our results have different implications for business and leisure travelers, given that regional services provide a higher frequency of flights (at the expense of higher fares), while low-cost services offer lower fares (at the expense of lower flight frequencies). Keywords: air transportation; regional jet technology; low-cost business model; thin markets. JEL Classification Numbers: L13; L2; L93.

Suggested Citation

  • Fageda, Xavier & Flores-Fillol, Ricardo, 2011. "Air services on thin routes: Regional versus low-cost airlines," Working Papers 2072/179624, Universitat Rovira i Virgili, Department of Economics.
    • Handle: RePEc:urv:wpaper:2072/179624
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    References listed on IDEAS

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    More about this item

    Keywords

    Línies aèries; Aviació comercial; 338 - Situació econòmica. Política econòmica. Gestió; control i planificació de l'economia. Producció. Serveis. Turisme. Preus;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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