Do carriers internalize congestion costs? Empirical evidence on the internalization question

Rupp, Nicholas G.

doi:10.1016/j.jue.2008.07.003

Cited by 75 publications

(53 citation statements)

References 29 publications

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“…29 The numbers reported in Table 2 are the mean annual percentage of on-time arrivals at each airport and include all the domestic services of airlines operating in that airport. From Table 2, it can be seen that JFK appears to be the most congested of the seven hubs, whereas Memphis and Salt Lake City are the least congested airports.…”

Section: Datamentioning

confidence: 99%

“…28 As a side note, MEM has been and remains the main hub airport for FedEx -a leading freight carrier in the US and global markets. 29 According to the methodology used by the BTS, a ‡ight is considered to be on-time if it has arrived no later than 15 minutes after its scheduled arrival time. 30 These services correspond to about ten percent of all our observations.…”

Section: (2z 1)mentioning

confidence: 99%

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Airline consolidation and the distribution of traffic between primary and secondary hubs

Bilotkach

Fageda

Flores-Fillol

2013

Regional Science and Urban Economics

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Several airline consolidation events have recently been completed both in Europe and in the United States. The model we develop considers two airlines operating hub-and-spoke networks, using di¤erent hubs to connect the same spoke airports.We assume the airlines to be vertically di¤erentiated, which allows us to distinguish between primary and secondary hubs. We conclude that this di¤erentiation in air services becomes more accentuated after consolidation, with an increased number of ‡ights being channeled through the primary hub. However, congestion can act as a brake on the concentration of ‡ight frequency in the primary hub following consolidation. Our empirical application involves an analysis of Delta's network following its merger with Northwest. We …nd evidence consistent with an increase in the importance of Delta's primary hubs at the expense of its secondary airports. We also …nd some evidence suggesting that the carrier chooses to divert tra¢ c away from those hub airports that were more prone to delays prior to the merger, in particular New York's JFK airport.

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Section: Datamentioning

confidence: 99%

Section: (2z 1)mentioning

confidence: 99%

Airline consolidation and the distribution of traffic between primary and secondary hubs

Bilotkach

Fageda

Flores-Fillol

2013

Regional Science and Urban Economics

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“…Delays at airports have been consistently increasing over the last years, becoming a major problem worldwide (see, for example, Rupp (2009) and Santos and Robin (2010)). Besides capacity enlargements, the price mechanism has been widely discussed and proposed to manage congestion.…”

Section: Introductionmentioning

confidence: 99%

Optimal Pricing of Flights and Passengers at Congested Airports: The Efficiency of Atomistic Charges

Silva

Verhoef

2011

SSRN Journal

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“…Rupp (2009) argues that on-time performance ratio is higher at hub airports. Passengers need to catch connecting flights, which will lead to high costs in cases of delays.…”

Section: On-time Performancementioning

confidence: 99%

The Total Size of an Airline and the Quality of its Flights

Montfort

Berg

2017

SSRN Journal

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We examine the relationship between the total size of an airline and its service quality by analysing over 4.8 million domestic flights within the USA in 2016. The total size of an airline is measured by its total market share, total amount of assets or total number of fulltime equivalent employees. Delays are a widely used proxy for service quality and the most common category of airline customer complaints. Numerous regressions have been estimated using arrival delay time and whether a flight arrives on time as dependent variables. The regressors of main interest were the total airline size and the degree of competition on the route and airport. We control for weather, congestion, date, and characteristics of the airport, flight and airplane. The results suggest that the larger the total size of an airline, the smaller its average delay time and delay occurrence. Hence, larger airlines seem to offer a higher quality in terms of delays. We also find that an origin airport with less competition may lead to more delays. Surprisingly, a less competitive route may reduce delays.

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Do carriers internalize congestion costs? Empirical evidence on the internalization question

Cited by 75 publications

References 29 publications

Airline consolidation and the distribution of traffic between primary and secondary hubs

Airline consolidation and the distribution of traffic between primary and secondary hubs

Optimal Pricing of Flights and Passengers at Congested Airports: The Efficiency of Atomistic Charges

The Total Size of an Airline and the Quality of its Flights

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