Journal
TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW
Volume 57, Issue -, Pages 45-57Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.tre.2013.01.005
Keywords
Airfares; Airline alliances; Airport leakage; Low cost carriers; US-Canadian air passenger market; Price premiums
Ask authors/readers for more resources
The US-Canadian air traffic market is one of the largest international markets in the world - estimated at 23 million passengers in 2008. The market is currently regulated by an Open Skies agreement, which eliminated all restrictions on the frequency of flights, the aircraft flown, and the fares charged on transborder routes. Although there is evidence that consumers have benefited from the Open Skies agreement, there is also evidence that many passengers have chosen to avoid transborder services, and instead fly from airports in US border cities and cross the border by surface transportation. This paper uses a passenger demand model to determine the scope of this leakage from transborder routes. In addition, transborder airfares are compared to US domestic airfares to determine whether transborder fares are excessive, a potential cause of the leakage. Results show a substantial amount of leakage estimated at over 4.7 million passengers for 2008. Furthermore, after controlling for the impact of route-specific variables, such as market concentration, average fares are 28.2% higher in the transborder market. Finally, policy implications and the future of the transborder air passenger market are discussed. (C) 2013 Elsevier Ltd. All rights reserved.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available