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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
The Influence of Price Discrimination from Airports on the Route Development Behavior of Airlines
Daniel Schnitzler
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DOI:10.17265/1934-7359/2024.01.004
Siegener Mittelstandsinstitut, University of Siegen, 57076 Siegen, Germany
Given the prominence and magnitude of airport incentive schemes, it is surprising that literature hitherto remains silent as to their effectiveness. In this paper, the relationship between airport incentive schemes and the route development behavior of airlines is analyzed. Because of rare and often controversial findings in the extant literature regarding relevant influencing variables for attracting airlines at an airport, expert interviews are used as a complement to formulate testable hypotheses in this regard. A fixed effects regression model is used to test the hypotheses with a dataset that covers all seat capacity offered at the 22 largest German commercial airports in the week 46 from 2004 to 2011. It is found that incentives from primary choice, as well as secondary choice airports, have a significant influence on Low Cost Carriers. Furthermore, Low Cost Carriers, in general, do not leave any of both types of airports when the incentives cease. In the case of Network Carriers, no case is found where one joins a primary choice airport and receives an incentive. Insufficient data between Network Carriers and secondary choice airports in the time when incentives have ceased means that no statement can be given.
Airline, rout development, price discrimination.
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