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| Author: | Flores-Fillol, R. Moner-Colonques, R. |
| Title: | Strategic formation of airline alliances |
| Journal: | Journal of Transport Economics and Policy
2007 : SEP, VOL. 41:3, p. 427-449 |
| Index terms: | transport economics strategic analysis airlines alliances models |
| Language: | eng |
| Abstract: | This paper looks at the endogenous formation (here as: f-n.) of airline alliances (as: a-alls.) by means of a two-stage game with first airlines deciding whether to form an alliance and then fares are determined. Analysed are the effects and the strategic f-n. of a-alls. when two complementary alliances, following different paths, may be formed to serve a certain city-pair market. Alliances hurt competitors decreasing interline fares. Contrary to what might be expected, the f-n. of a-alls. may be unprofitable in a competitive context. This is likely to happen when competition is significant and economies of traffic density are low. |
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