The Impact Of Entry And Competition On Airline Departure Frequency

Abstract

This paper examines how entry and competition impact departure frequency using data from 1990–2009 on a number of routes served by at least two airlines. The estimated frequency equation indicates that an additional airline at the route level results in a slight decrease in the number of departures despite a substantial increase in passenger traffic since the industry was liberalized in 1995. The results suggest that domestic airlines have shifted to relatively larger aircraft and operate them at higher load factors. The use of larger aircraft operated at higher load factors may indicate their inability to secure additional landing slots, suggesting that investments in air transport infrastructure have not kept pace with demand. Fewer departures indicate that the waiting time between flights has increased, reducing the probability of matching the passengers’ preferred departure times with scheduled flights. The longer waiting time between flights and more congestion inside the aircraft due to higher load factors suggest that the service quality of air transport has deteriorated in the post-regulation period.