The spatial scope of airline competition

Lijesen, Mark; Behrens, Christiaan

doi:10.1016/j.tre.2016.12.004

Cited by 15 publications

(8 citation statements)

References 26 publications

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“…Several more or less adjacent flight routes are available; Lyon (98 km from Geneva) is served from Amsterdam airport and flights depart from Dusseldorf (179 km from Amsterdam) and Brussels (158 km) to Geneva and Lyon. Based on the distance decay function and parameter values used by Lijesen and Behrens (2017), only Amsterdam-Lyon might be a viable alternative. Due to the geographic situation, the landside travel time from Lyon airport to Geneva is 1 h and 35 min, which is about as long as the flight time itself.…”

Section: Setup and Case Selectionmentioning

confidence: 99%

“…In the economic literature on civil aviation, flights are commonly thought of as imperfect substitutes (Alderighi et al, 2015;Basso, 2008;Borenstein & Netz, 1999;Lijesen & Behrens, 2017). Characteristics that affect the level of substitution include the (perceived) quality of the airline, booking restrictions, routing of the flight and time of departure.…”

Section: Introductionmentioning

confidence: 99%

“…First, the level of substitutability partly determines the boundaries of the relevant market (see e.g. Lijesen & Behrens, 2017), which is valuable information both for policy makers and for academics looking to assess (changes in) the level of competition. Second, the level of substitutability has an impact on price dispersion.…”

Section: Introductionmentioning

confidence: 99%

“…Dai et al, 2014;Gerardi and Shapiro, 2009) ignore this issue by focusing on direct flights (and hence ignore the presence of the close substitute) or by limiting the analysis to flights where indirect flights are hardly a viable alternative (e.g. Chandra & Lederman, 2016;Lijesen & Behrens, 2017).…”

Section: Introductionmentioning

confidence: 99%

“…This issue of competition between nearby airports has been extensively treated on a case-by-case basis (examples include Jun andVan Dender, 2009 andPels, Nijkamp, &Rietveld, 2000). Lijesen and Behrens (2017) analyze the extent to which alternative city-or airportpairs impact airline competition and find that the relevant market for a flight extends well beyond the city-pair level.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Pricing of imperfect substitutes: The next flight is not the same flight

Bogaard

Lijesen

2019

Research in Transportation Economics

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We investigate how airfares respond to changes in the fare of adjacent flights. Using a fixed effects regression on fares from Amsterdam to Geneva, we find flights that only differ in departure times to be weak substitutes. Fareto-fare elasticities for imperfect substitute flights of different airlines are even smaller, implying weak competition between airlines on this specific route. If our findings hold for other routes as well, this will have implications for the analysis of price dispersion in civil aviation. It would imply that demand shocks for individual flights have small effects on prices of other flights. Demand volatility would then be likely to affect price dispersion on a route level and should be considered when analyzing price dispersion.

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Section: Setup and Case Selectionmentioning

confidence: 99%