CONGESTION, CONCENTRATION, AND CONTESTABILITY: THE CASE OF THE AIRLINE INDUSTRY

When the contestability theory was first developed, it was believed that the airline industry represented the ideal case of ultra free entry. As empirical evidence mounted, it became clear that only the weak form of the theory applied. A major reason for this change was the recognition that, while entry was free in the regulatory sense, at the level of practice, problems still remained. A major contributor to restricted entry was airport capacity limitations. These shortages of capacity bestow a variety of competitive advantages on incumbent carriers. The auctioning of airport capacity is suggested as a means of increasing the contestability of the airline markets, given that it levels the playing field. The paper demonstrates that it is not feasible for financially strong carriers to attempt to use the auctions to exclude potential rivals, nor to expel competitors from the market.

• Record URL:
  http://onlinepubs.trb.org/Onlinepubs/trr/1989/1214/1214-005.pdf
• Record URL:
  https://scholar.google.com/scholar_lookup?title=CONGESTION%2C+CONCENTRATION%2C+AND+CONTESTABILITY%3A+THE+CASE+OF+THE+AIRLINE+INDUSTRY&author=J.+Brander&author=B.+Cook&author=J.+Rowcroft&publication_year=1989
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/isbn/0309048176
• Supplemental Notes:
  • This paper appears in Transportation Research Record No. 1214, Modeling and Analysis of Airport and Aircraft Operations. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved
• Authors:
  • Brander, John R G
  • Cook, B A
  • Rowcroft, John E
• Publication Date: 1989

Media Info

• Features: References; Tables;
• Pagination: p. 37-42
• Monograph Title: Modeling and Analysis of Airport and Aircraft Operations
• Serial:
  • Transportation Research Record
  • Issue Number: 1214
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Airlines; Airport capacity; Competition; Market development; Shortages; Slot allocation
• Uncontrolled Terms: Market entry
• Old TRIS Terms: Contestability; Slot auctions
• Subject Areas: Administration and Management; Aviation; Highways; Planning and Forecasting;

Filing Info

• Accession Number: 00494441
• Record Type: Publication
• ISBN: 0309048176
• Files: TRIS, TRB
• Created Date: May 31 1990 12:00AM