Title: Carve-outs under airline antitrust immunity
Authors: Brueckner, Jan K ×
Proost, Stef #
Issue Date: 2010
Series Title: International Journal of Industrial Organization vol:28 issue:6 pages:657-668
Abstract: This paper offers the first formal economic analysis of carve-outs under airline antitrust immunity. Carve-outs are designed to limit the potential anticompetitive effects of cooperation by alliance partners in hub-to-hub markets, where they provide overlapping nonstop service. While the paper shows that carve-outs are beneficial when the alliance does not involve full integration of the partners' operations on the hub-to-hub route, its key point is that a carve-out may be harmful when imposed on a joint-venture alliance. A JV alliance involves full exploitation of economies of traffic density on the hub-to-hub route, and a carve-out prevents the realization of these benefits. While a carve-out may limit anticompetitive incentives on the hub-to-hub route, welfare may be reduced if the resulting gains are overshadowed by the efficiency loss generated by the carve-out.
ISSN: 0167-7187
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center of Energy, Transport and Environment, Leuven
× corresponding author
# (joint) last author

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