Highlights This study investigates airport-airline vertical arrangements on airport capacity. Capital cost savings lead to higher capacity. Vertical arrangements lead to higher profit for a profit-maximising airport. Vertical arrangements lead to higher welfare for a welfare-maximising airport. Win-win outcomes may be achieved without government intervention.

    Abstract This study investigates the effects of airport-airline vertical arrangements on airport capacity choices under demand uncertainty. A multi-stage game is analysed, in which competing airlines contribute to capacity investments and share airport revenues. Our analytical results suggest that for a profit-maximising airport, such a vertical arrangement leads to higher capacity but may not increase its profit, whereas for a welfare-maximising airport, such an arrangement has no effect on capacity or welfare. Capital cost savings brought by airport-airline cooperation, if any, always lead to higher capacity, and to higher profit for a profit-maximising airport and higher welfare for a welfare-maximising airport. Numerical simulations reveal that win-win outcomes may be achieved for an airport and its airlines without government intervention.


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    Titel :

    Airport capacity choice under airport-airline vertical arrangements


    Beteiligte:
    Xiao, Yibin (Autor:in) / Fu, Xiaowen (Autor:in) / Zhang, Anming (Autor:in)


    Erscheinungsdatum :

    2016-01-01


    Format / Umfang :

    12 pages




    Medientyp :

    Aufsatz (Zeitschrift)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch





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