eduzhai > Applied Sciences > Transportation >

Congestion and Market Structure in the Airline Industry

  • Save

... pages left unread,continue reading

Document pages: 43 pages

Abstract: Empirical research on the relationship between market congestion and the market competitive level largely falsifies the positive relationship predicted by theoretical models. In this paper, I exploit the airline industry network structure and focus on the level of congestion during periods in which passengers cross-connect to their final destinations. About 70 of hub airport flights depart or land during these periods. The empirical analysis establishes a strong positive relationship. Furthermore, based on a simple theoretical model, I am able to quantify the potential time savings from eliminating congestion externalities and find that, on average, a flight can save 2 minutes of flight time at its departing airport and another 1.5 minutes at its destination airport. I also find that airlines choose to pad their schedule particularly on competitive routes, presumably to attract uninformed passengers.

Please select stars to rate!

         

0 comments Sign in to leave a comment.

    Data loading, please wait...
×