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Complementary versus Semi-Complementary Airline Partnerships

Lookup NU author(s): Dr Volodymyr Bilotkach

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Abstract

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.


Publication metadata

Author(s): Bilotkach V

Publication type: Article

Journal: Transportation Research Part B: Methodological

Year: 2007

Volume: 41

Issue: 4

Pages: 381-393

ISSN (print): 0191-2615

ISSN (electronic): 1879-2367

Publisher: Pergamon

URL: http://dx.doi.org/10.1016/j.trb.2006.06.002

DOI: 10.1016/j.trb.2006.06.002


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