Competition transmits across routes because of

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Unformatted text preview: smits across routes because of returns to traffic density and suggest that antitrust treatment on this issue should be more carefully looked at. Brueckner (2001) adapts the former model to an international setting. His analysis emphasizes the beneficial impact for passengers derived from complementary alliances, since they put a downward pressure on fares in the interline city-pair markets: "a couple of studies showed that tickets booked through allied airlines on two-stage flights were 18-28% cheaper than separate flights on the same route with non-allied airlines".3 Hassin and Shy (2004) also examine codesharing agreements among airlines competing on international routes and show that codesharing including all carriers are welfare improving. On the other hand, Park (1997) classifies alliances in two categories: parallel and complementary. A parallel alliance refers to collaboration between two firms competing on the same route and the complementary one refers to the case where two firms link up their existent networks and build a new network providing an interlining service to their passengers. Park (...
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This note was uploaded on 05/12/2010 for the course MAN 6721 taught by Professor Kraft during the Spring '10 term at University of Florida.

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