This paper deals with the socially optimal pricing of airports in a hub-and-spoke network, taking into account explicitly the fact that demands for airport services at hub airport and spoke airports are complementary. It is shown that a welfare gain is to be made by switching from the regime of...

Operating lease of the aircraft gives the airlines flexibility in capacity management. However, airlines pay a risk premium to the leasing companies for bearing part of the risks. Therefore, the airlines face a trade-off between flexibility of capacity and higher costs. This paper develops a...

This paper develops a theoretical model to investigate the effect of airline alliances on market outcome for fairly general demand and cost specifications. Two typical alliance types are examined: complementary and parallel alliances. The complementary alliance refers to the case where two firms...

In this paper, we study airport decisions on pricing and capacity investment with both aeronautical and concession operations. In addition, the airport under consideration is serving air carriers who have market power. We find that a profit-maximizing airport would over-invest in capacity in the...

This paper presents results of an econometric study study of intercity travel demands in Canada, 1961-1976. A translog form of reciprocal indirect utility function is used to test the structure of preferences in five demand sectors: three travel modes, goods and other services. Travel sector...

This paper extends the literature on airport congestion pricing by allowing carriers to price-discriminate between the business and leisure passengers when operating costs are the same for all passengers. The main results are: First, the second-best discriminating business fare exceeds the...

This paper investigates the effects of competition between air transport and high-speed rail (HSR). While airlines are assumed to maximize profit, HSR may maximize a weighted sum of profit and social welfare. We show that both airfare and HSR fare fall as the weight of welfare in the HSR’s...

This paper analyzes the effects of cooperation between a hub-and-spoke airline and a high-speed rail (HSR) operator when the hub airport may be capacity-constrained. We find that such cooperation reduces traffic in markets where prior modal competition occurs, but may increase traffic in other...

Airport pricing papers can be divided into two approaches. In the traditional approach the demand for airport services depends on airport charges and on congestion costs of both passengers and airlines; the airline market is not formally modeled. In the vertical-structure approach instead,...

This paper explores the effect of airline emissions charges on airfares, airline service quality, aircraft design features, and network structure, using a detailed and realistic theoretical model of competing duopoly airlines. These impacts are derived by analyzing the effects of an increase in...