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Author: | Czerny, A.I. |
Title: | Code-sharing, price discrimination and welfare losses |
Journal: | Journal of Transport Economics and Policy
2009 : MAY, VOL. 43:2, p. 193-210 |
Index terms: | airlines co-operation regulations transport economics price discrimination |
Language: | eng |
Abstract: | Airlines frequently use code-share agreements, which allow each other to sell seats on flights operated by partner airlines. Regulation may allow code-share agreements with antitrust immunity (cooperative price setting), or without it, or not at all. The relative welfare effects of these regulation regimes are compared on complementary airline networks. A critical point is that such agreements are used in identifying and price-discriminating interline passengers. The findings are that interline passengers always benefit from code-share agreements whereas non-interline passengers are worse off. Moreover, I show that the latter effect challenges the overall usefulness of code-share agreements from a welfare perspective. |
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