“Joint ventures in the transatlantic airline market” (joint with Xavier Fageda and Bernd Theilen)
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Abstract: This study investigates, both theoretically and empirically, the effects of joint ventures on traffic. Although alliances are a pre-condition for joint ventures, both cooperation agreements different in their nature. The reason is that alliances are revenue-sharing agreements whereas joint ventures also involve a cost-sharing commitment. Our empirical analysis focuses on the transatlantic market including non-stop routings (interhub markets) and one-stopover routings (interline markets). Our theoretical and empirical findings emphasize the relevance of economies of traffic density and reveal a positive effect of joint ventures on traffic, both in interhub and interline markets.
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