Lookup NU author(s): Dr Volodymyr Bilotkach
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As low-cost airlines or carriers excluded from international markets by regulation may seek to expand internationally in an indirect way through code-sharing agreements, they can choose partner airlines from among domestic or international carriers. The former case results in a semi-complementary partnership, while in the latter a classic complementary alliance is formed. This paper compares welfare properties of the two types of partnerships under economies of traffic density. Semi-complementary partnerships yield higher total welfare (but not necessarily lower prices) when economies of traffic density are strong, demand is more price-sensitive, or where a carrier feeding domestic traffic to international routes is a lower cost one.
Author(s): Bilotkach V
Publication type: Article
Journal: Transportation Research Part B: Methodological
ISSN (print): 0191-2615
ISSN (electronic): 1879-2367
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