An incentive pricing mechanism for efficient airport slot allocation in Europe

Avenali, Alessandro; D’Alfonso, Tiziana; Leporelli, Claudio; Matteucci, Giorgio; Nastasi, Alberto; Reverberi, Pierfrancesco

doi:10.1016/j.jairtraman.2014.07.009

Cited by 25 publications

(8 citation statements)

References 27 publications

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“…The European Commission pursues the optimal allocation and use of slots to foster competition and improve quality of air transport services (EC, 2011). In this framework, Avenali et al (2015) study an incentive pricing mechanism to manage effectively scarce capacity at congested hubs.…”

Section: Discussionmentioning

confidence: 99%

Air-rail cooperation: Partnership level, market structure and welfare implications

Jiang

D’Alfonso

Wan

2017

Transportation Research Part B: Methodological

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We build a theoretical model to study different air-rail cooperation scenarios. We investigate two possible air-rail partnerships between a rail operator and either a domestic airline or a foreign airline. When a partnership is formed, an investment to improve the airrail connecting service is allowed at a cost before the service is launched. We find that the cooperation level, the equilibrium partnership scenarios when air-rail cooperation is exclusive or non-exclusive, as well as the comparisons of social welfare under different partnership scenarios, all depend on the pre-investment quality of air-rail service compared with the quality of air-air service. We further apply our model to the real-life case of Strasbourg-Paris-Dubai market, showing that other factors, such as price sensitivity of demand, horizontal differentiation between air and rail, and asymmetries in partnership investment costs, also affect cooperation level.

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Section: Discussionmentioning

confidence: 99%

Air-rail cooperation: Partnership level, market structure and welfare implications

Jiang

D’Alfonso

Wan

2017

Transportation Research Part B: Methodological

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“…A further extension could be considering the presence of a supra-national regulatory agency in the EU that, given the regime of regional exhaustion of IPR, controls pricing decisions in each Member State to improve global welfare (see e.g. [22]). This issue is particularly relevant for the EU pharmaceutical industry, where PT is allowed in a context where pricing policies are still the prerogative of national governments.…”

Section: Discussionmentioning

confidence: 99%

Vertical Control and Parallel Trade under Asymmetric Information

Avenali

Leporelli

Matteucci

et al. 2015

International Journal of Engineering Business Management

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Parallel trade (PT) is a practice related to arbitrage operations in international trade. We provide a rationale for PT as an opportunistic behaviour by an international wholesaler who is privately informed about market demands in two countries where a multinational firm operates. This alternative theory of PT contributes to an explanation of why PT has gained considerable importance in various industries, and why it has not yet resulted in price convergence across relevant countries. Indeed, we find that asymmetric information enlarges the scope for PT, relative to complete information, and possibly increases crosscountry differences in prices. The European Commission supports PT as a means to achieve the integration of national markets, to the benefit of all citizens. However, under asymmetric information, consumers benefit from PT only with a high volume of parallel imports (e.g., when arbitrage costs are low); otherwise competition among wholesalers can be an effective substitute for PT. Furthermore, an important implication of PT is the transfer of profits from the manufacturer to the wholesaler. Therefore, in R&D-intensive industries, such as pharmaceuticals, policy makers should anticipate the likely consequences of PT under asymmetric information on the long-run incentives to innovate.

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“…et al (1996) Business cycle dynamics Rogoff (2006) Inflation and recessions Kim and Loungani (1992) Exchange rates Chen and Chen (2007);Chang et al (2013) Stock price returns Sadorsky (2001) Nandha et al (2013) Economic growth Cologni and Manera (2008) Country-based studies Park and Ratti (2007) Carter et al (2006), Turner and Lim (2015) for USA; Avenali et al (2015) for Europe…”

Section: Effects On Financial Performancementioning

confidence: 99%

“…We investigate this sector because airline companies are significantly exposed to oil price movements (jet fuel in particular). In this industry the variations of fuel prices significantly affect companies' profits (Avenali et al 2015), but these correlations have been only partially investigated so far. The study proposed by Elyasiani et al (2011) highlights that in those sectors that are oil-users -like air transportation -price dynamics have a great impact on the sector returns.…”

Section: Effects On Company Performance In the Airline Industrymentioning

confidence: 99%

Jet Fuel Price Variations and Market Value: A Focus on Low-Cost and Regular Airline Companies

Gaudenzi

Bucciol

2016

Journal of Business Economics and Management

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Abstract. We analyze the relationship between dynamics to stock prices and jet fuel prices, conditional on financial and company-specific variables, in the airline sector. In particular, our contribution to the literature is in the comparison between regular and low-cost airline companies. We run a set of fixed-effect regressions where the dependent variable, the stock daily return of the airline company (observed between 2008 and 2014) is regressed over three sets of explanatory variables (financial, company-specific and time variables). While large and small companies provide similar results, we find that the company price return -among different variables -correlates only with the jet fuel return and the stock market return. Our work also suggests that there is a difference between regular and low-cost companies. We speculate that this possibly arises because low-cost companies stock-pile in a more efficient way, which depends less on current jet fuel price. Our evidence then sheds light on the efficiency of the low-cost model and may suggest to export part of its practice among regular airline companies.

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An incentive pricing mechanism for efficient airport slot allocation in Europe

Cited by 25 publications

References 27 publications

Air-rail cooperation: Partnership level, market structure and welfare implications

Air-rail cooperation: Partnership level, market structure and welfare implications

Vertical Control and Parallel Trade under Asymmetric Information

Jet Fuel Price Variations and Market Value: A Focus on Low-Cost and Regular Airline Companies

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