By Darin Lee
This is often the 1st in a brand new sequence of books at the economics of the airline undefined. The sequence is a set of unique, state of the art learn papers from a world panel of exotic individuals. quantity 1 will specialise in issues relating to pageant coverage and antitrust, reminiscent of the industrial effect of airline alliances (both overseas and domestic), predation, and incumbent responses to low-cost access. a part of a "New Series", this quantity makes a speciality of pageant coverage and antitrust. Its members are overseas specialists within the box.
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Extra resources for Advances in Airline Economics, Volume 1: Competition Policy and Antritrust (Advances in Airline Economics)
As it turns out, cases involving alleged predation do not compare individual fares with per passenger variable costs. Rather, as a minimum, economists have done revenue and cost comparisons at the flight level. Still, the question remains as to the appropriate measures of revenue and costs to be used for the test. Should a given flight’s revenues, for example, include some portion of the revenues of passengers connecting from or to other flights? Should the measure of flight costs include only variable costs, or should it also include fixed costs such as aircraft costs?
Department of Transportation OD1A and Commuter 298C T-1 data. 1 Note: Low-Fare Carriers are: Air South, Airtran Airways, American Trans Air, Carnival Air Lines, Frontier, Jet Blue, Kiwi International, Markair, Midway Air, Midwest Express, Morris Air, National Airlines, Reno Air, Sirit Airlines, Sun Country Air, Tower Air, Valuejet Airlines, Vangaurd Air, and Western Pacific. Source: Data Base Products, Inc. S. Department of Transportation OD1A and Commuter 298C T-1 data. PREDATION AND THE ENTRY AND EXIT OF LOW-FARE CARRIERS 21 Table 8 Median Incumbent Average Fare Change After Exit, Low-Fare vs.
2001). S. v. , 335 F. 3d 1109 (10th Cir. 2003). PREDATION IN AIRLINE MARKETS: A REVIEW OF RECENT CASES 35 Focusing on four routes (Dallas/Fort Worth and Kansas City, Wichita, Long Beach, and Colorado Springs), the DOJ argued in the initial complaint that as a result of AMR’s capacity expansion, accompanied by reduced fares, added flights on each route were being operated below their variable costs, total revenues on each route fell below total costs of serving the route, and each route was being operated unprofitably according to AMR’s own route profitability indexes.