To illustrate our analysis let us consider the

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Unformatted text preview: trate our analysis let us consider the following simple network structure. Suppose that a passenger wishes to travel from Madrid to Washington. He can fly via Chicago O'Hare International or via London Heathrow. In the former case, Madrid-Chicago is provided by Iberia 1 See Morrison and Winston (1995) for an overview of developments in the industry. 1 (e.g. IB6275) and Chicago-Washington R.Reagan National is operated by American Airlines (e.g. IB7063). In the latter, the passenger can fly with British Midland from Madrid to London (e.g. BD482) and then make the trip between London and Washington Dulles International with United Airlines (e.g. UA925). As it turns out, Iberia and American Airlines belong to the Oneworld alliance - in fact, our example is one of a codesharing agreement. On the other hand, British Midland and United Airlines are partners in the Star Alliance.2 It is our purpose to characterize the pre-alliance and alliance situations when there is competition between routes through different hubs and each trip requires travelling with two carriers, which are viewed by passengers as complementary products. The existin...
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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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