By E. Weisman
Booklet by means of Weisman, E.
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Additional resources for Trade in Services and Imperfect Competition: Application to International Aviation
Sample text
Passengers enjoy easy on-line connections and simplified baggage transfers under hubbing-and-spoking. Moreover, the multitude of choices and added frequency can more closely conform to consumers' preferences. In fact, greater frequency may compensate for the longer travel time needed for one-stop service compared with a direct flight. In addition to the plain benefits of higher frequency, people traveling in or out of a hub may fly on a larger, more comfortable 3 An excellent treatment of the hubbing-and-spoking phenomenon can be found in Civil Avi- ation Authority (1984b), appendix three, pages 52-55.
S. views o~ deregulation did not remain restricted to domestic routes. A natural consequence of deregulated air transport was the spread of this approach to all connecting transport links. The international context is replete with regulations 26 through bilateral air service agreements. Many of these restrictions have been hard to combat since most countries maintain a single national flag carrier and protection of air transport often is supported by arguments of national security, national pride, and other non-economic factors.
T. F. e. fewer seats available for on-demand purchase) then this represents a reduction in prodiIct standard which is offered. In these circumstances lower costs are not economies of scale but a change in the production function. S. airlines) had similar findings. In short, "economies of scale are negligible or non-existent at the overall firm level", (White, 1979, p. 564). Recent research concurs with these conclusions. K. S. K. equally well. The careful work of Caves, Christensen, and Tretheway (1984) supports these findings, adding that different kind of economies are derived from increasing the density of traffic on a network.