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A metric to assess the competitive position of airlines and airline groups in the intra-European air transport market

Maertens, Sven (2018) A metric to assess the competitive position of airlines and airline groups in the intra-European air transport market. Research in Transportation Economics. Elsevier. DOI: 10.1016/j.retrec.2018.07.018 ISSN 0739-8859

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Official URL: https://www.sciencedirect.com/science/article/abs/pii/S0739885917303359

Abstract

A strong competitive position can not only be regarded as a key success factor for firms, but may also indicate market power. As with operators of other long-distance transport modes, like e.g. train or coach operators, assessing an airline's overall competitive position is not trivial: This is because airlines serve many different, direct and indirect origin-destination (OD) markets between which competition intensity can vary immensely. Hence, airline (or rather airline group) networks compete against each other, meaning that “typical”, e.g. HHI-based competition assessments at, e.g., the national, airport or direct route levels will not be sufficient to get a full picture. This paper presents a modelling approach for an indicator for the individual competitive positions (CP) of airlines and airline groups at the network level. An application to the intra-European market, based on OD data for 2015, indicates a quite comfortable competitive position for low cost carriers like Ryanair, WIZZ Air, FlyBE or Volotea, followed by the major airline groups (Lufthansa, Air France-KLM, IAG) which focus on hub and spoke networks along some low cost activities. The weakest CP's within our sample of the 30 largest European airlines and airline groups are calculated for leisure airlines like Monarch, which recently filed for bankruptcy.

Item URL in elib:https://elib.dlr.de/121469/
Document Type:Article
Title:A metric to assess the competitive position of airlines and airline groups in the intra-European air transport market
Authors:
AuthorsInstitution or Email of AuthorsAuthors ORCID iD
Maertens, Svensven.maertens (at) dlr.dehttps://orcid.org/0000-0002-4618-0946
Date:20 July 2018
Journal or Publication Title:Research in Transportation Economics
Refereed publication:Yes
Open Access:No
Gold Open Access:No
In SCOPUS:Yes
In ISI Web of Science:Yes
DOI :10.1016/j.retrec.2018.07.018
Publisher:Elsevier
ISSN:0739-8859
Status:Published
Keywords:Airline competition; Airline network competition; Market power; Competitive position; European airlines; Leisure airlines; Air transport market; Airline groups; Low cost carriers; Low cost airlines; Hub-and-spoke; Herfindahl-Hirschman index
HGF - Research field:Aeronautics, Space and Transport
HGF - Program:Transport
HGF - Program Themes:Transport System
DLR - Research area:Transport
DLR - Program:V VS - Verkehrssystem
DLR - Research theme (Project):V - Ökonver
Location: Köln-Porz
Institutes and Institutions:Institute of Air Transport and Airport Research > Air Transport Research
Deposited By: Maertens, Dr. Sven
Deposited On:27 Aug 2018 13:49
Last Modified:05 Jun 2019 13:36

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