| Abstract: | This research applies the bi‐level market model to the Asia‐based international air transport markets. The model is a two‐stage game in which airlines act as leaders and passengers act as followers. Airlines are assumed to control flight frequencies, and passengers are assumed to choose their optimal route. At the equilibrium point, we have subgame perfect equilibrium. We apply this model to 2003 Asia‐based international air transport markets and conduct some scenario studies. We find that discounting landing charges at Narita Airport increases the passenger flow but diminishes the gateway function for trans‐Pacific transport. |
