The welfare effects of the allocation of airlines to different terminals

• Autores: María Pilar Socorro Quevedo, Ofelia Betancor Cruz
• Localización: Notas técnicas: [continuación de Documentos de Trabajo FUNCAS], ISSN-e 1988-8767, Nº. 420, 2008
• Idioma: inglés
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• Resumen

  • Many airports around the world have recently built or are in the process of constructing or rebuilding new terminals. Airlines operating in those airports must be reallocated between the new and old facilities. In this paper we construct a theoretical model which shows that, in general, if airlines are allocated to separate terminals, the level of competition between airlines is reduced, ticket prices become higher and consumer surplus and social welfare lower. Only in some routes, and under certain conditions on the market size, ticket prices may be lower.