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The remains of regulation: airlines' profits after liberalization

Marin, Pedro L. (1995) The remains of regulation: airlines' profits after liberalization. EI, 12. Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science, London, UK.

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Abstract

This paper develops an empirical model of entry to analyze the effect of previous regulation on European airlines? post-liberalization profits. The author distinguishes between European flag carriers, which are hightly regulated at the beginning of the eighties, and independent airlines. It is found that the latter enjoy sunk cost advantages but get lower variable profits than the former. This means that possible efficiency disadvantages suffered by the flag carriers are more than offset by their higher perceived quality, leading to a situation in which they are less likely to enter a route, but also less likely to exit.

Item Type: Monograph (Discussion Paper)
Official URL: http://sticerd.lse.ac.uk
Additional Information: © 1995 Pedro L.Marin
Library of Congress subject classification: H Social Sciences > HE Transportation and Communications
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: L - Industrial Organization > L5 - Regulation and Industrial Policy > L59 - Other
L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L93 - Air Transportation
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L19 - Other
Sets: Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 12
Date Deposited: 09 Jul 2008 09:22
URL: http://eprints.lse.ac.uk/6774/

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