Article ID: | iaor1999787 |
Country: | United Kingdom |
Volume: | 33E |
Issue: | 4 |
Start Page Number: | 275 |
End Page Number: | 286 |
Publication Date: | Dec 1997 |
Journal: | Transportation Research. Part E, Logistics and Transportation Review |
Authors: | Nijkamp Peter, Rietveld Piet, Pels Eric |
Keywords: | hub location |
In this paper a model concerning substitution and complementarity on the linkage between airport facilities and airlines from the viewpoint of pricing policy is formulated. This model is used to analyze whether airport pricing policies, e.g. to ensure cost recovery, are compatible with competition for transfer passengers. It is found that airports with a high volume of demand can pursue cost recovery and still be the most preferred hub. Airports with a low level of demand will not be the preferred hub, even if the larger airport charges higher taxes to recover costs.