COMPETITION AND CONCENTRATION IN CANADIAN-U.S. TRANSBORDER AVIATION MARKETS

In February 1995, Canada and the U.S. negotiated a new air services agreement (ASA). The new ASA gives carriers the opportunity to develop new services to meet the evolving needs of transborder travelers. The purpose of this article is to explore the impact of the February 1995 ASA on the market for transborder airline services. In particular, it assesses the carriers' reactions to the freedom of entry provided by the 1995 ASA and how their entry decisions have affected concentration and competition in transborder markets. The likelihood that competition in certain transborder markets could be hindered is a real concern. To assess these effects, the paper begins by reviewing the domestic, international, and transborder aviation policies of the two countries. After discussing the provisions of the new ASA, the paper then examines its impact on competition and concentration in the transborder air services market using three definitions of the relevant market. The article concludes that while concentration has increased in several transborder markets subsequent to the signing of the 1995 ASA, the substantial increase in transborder service suggests that consumers have nonetheless benefitted from the new ASA.

Language

  • English

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Filing Info

  • Accession Number: 00769296
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Sep 23 1999 12:00AM