Autore:
Nero, Giovanni Titolo:
A structural model of intra-European airline competitionPeriodico:
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papersAnno:
1994 - Fascicolo:
14 - Pagina iniziale:
1 - Pagina finale:
40This paper presents a structural model of intra-European airline competition. Using a two countries/two airlines (flag-carriers) framework, three different competitive scenarios are analysed. These scenarios reflect the new E C competition rules. The results suggest that, when flag-carriers operate hub-and-spoke networks, the potential welfare gains arising with the abandoning of collusive practices are significant throughout the network. In addition, the model shows that, with increasing returns to density, a crossborder merger between two flag-carriers m ay increase the net social welfare throughout the network. Consequently, the threat of m onopolisation through merger should not be of primary concern to E C antitrust authorities.
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