When trains go faster than planes : the strategic reaction of airlines in Spain

Juan Luis Jiménez (Departamento de Análisis Económico Aplicado, Universidad de Las Palmas de Gran Canaria), Ofelia Betancor (Departamento de Análisis Económico Aplicado, Universidad de Las Palmas de Gran Canaria and Fundación de Estudios de Economía Aplicada (FEDEA))

Plans for the development of high speed railways lines (HSR) in Spain are widespread. At the beginning of 2010 four HSR lines were operating in routes where the air transport mode used to be dominant. In this paper we examine through econometric means the air carriers' reaction to these HSR entrances by using data at the route level. We test whether the HSR have changed both, the airlines' frequencies and the market shares. Our results show that it has reduced on average the number of air transport operations by 17 percent. On the other hand the demand has increased substantially, though the weight of air transport in the total market has been reduced, as it has been reduced the weight of the dominant Spanish air carrier Iberia on air markets.

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Year of publication:	February 2011
Authors:	Jiménez, Juan Luis ; Betancor, Ofelia
Published in:	New challenges for European regions and urban areas in a globalised world : 51st ERSA Congress : 51st European Congress of the Regional Science Association International : 37th Spanish Regional Science Association Conference : 30th August - 3rd September 2011, Barcelona, Spain
Publisher:	[Louvain-la-Neuve] : European Regional Science Association
Subject:	Intermodal competition \| Air transport \| Rail transport \| Luftverkehr \| Spanien \| Spain \| Schienenverkehr \| Railway transport \| Fluggesellschaft \| Airline \| Verkehrsträgerwettbewerb \| Wettbewerb \| Competition