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Comparing spatial concentration and assessing relative market structure in air traffic
Authors:Hans Huber
Affiliation:Shailesh J. Mehta School of Management, Indian Institute of Technology – Bombay, Powai, Mumbai 400 076, India;Toulouse Business School, 31068 Toulouse, France and Smith School of Enterprise and the Environment, Oxford University, Oxford OX1 2BQ, UK;Sauder School of Business, University of British Columbia, Vancouver V6T 1Z2, Canada;Sauder School of Business, University of British Columbia, Vancouver V6T 1Z2, Canada
Abstract:Traffic distributions of air traffic and their concentration have been measured through Gini, an index that contrasts in many ways with other more established ones, such as Herfindahl's. This research is extended in the sense that it perceives spatial concentration in air transport as an aggregate of complex networks that are subject to multiple constraints, such as geopolitics or technology. We propose a multi-layered analytic approach where network operators are economic agents that behave in strategic ways. It allows for comparing air traffic between airports in Europe with that of the US and, in particular, introduces a normative component by isolating patterns in airlines' strategies that coincide with more or less welfare-oriented degrees of spatial concentration in light of the above constraints.
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