Revenue Sharing with Multiple Airlines and Airports

This paper investigates the effects of concession revenue sharing between an airport and its airlines. It is found that the degree of revenue sharing will be affected by how carriers’ services are related (complements, independent, or substitutes). In particular, when carriers provide substitutable services, the sharing proportions might become negative if horizontal substitutability is sufficiently strong. In these situations, while revenue sharing improves profit, it reduces social welfare. It is further found that airport competition results in a higher degree of revenue sharing than would be had in the case of single airports. Nevertheless, the airport-airline chains may derive lower profits through this revenue-sharing rivalry, and the situation is similar to a classic Prisoners’ Dilemma. As the airport-airline chains move further away from their joint profit maximum, social welfare rises beyond the level achievable by single airports. Our analysis also shows that the (equilibrium) revenue-sharing proportion at an airport decreases in the number of its carriers, and increases in the number of carriers at the competing airports. Finally, the effects of the pure sharing contract are compared with those of the two-part sharing contract

Understanding airline price dispersion in the presence of high-speed rail

This paper examines the price dispersion among China's “Big Three”, namely, Air China, China Eastern and China Southern in the presence of high-speed rail (HSR). It has been found that HSR is positively and significantly associated with airline price dispersion on the long-haul routes, which may suggest that the presence of HSR can facilitate airline cooperation in setting prices and outputs, thereby leading to greater price dispersion. However, on the short-haul routes where HSR is highly substitutable, the HSR competition effect dominates, and smaller price dispersion is observed. All the market structure and competition variables included in this study support the conclusion that price dispersion is greater in more concentrated and more densely travelled markets. The contribution of airline cost to price dispersion is limited

Optimizing the design of nanostructures for improved thermal conduction within confined spaces

Maintaining constant temperature is of particular importance to the normal operation of electronic devices. Aiming at the question, this paper proposes an optimum design of nanostructures made of high thermal conductive nanomaterials to provide outstanding heat dissipation from the confined interior (possibly nanosized) to the micro-spaces of electronic devices. The design incorporates a carbon nanocone for conducting heat from the interior to the exterior of a miniature electronic device, with the optimum diameter, D0, of the nanocone satisfying the relationship: D02(x) ∝ x1/2 where x is the position along the length direction of the carbon nanocone. Branched structure made of single-walled carbon nanotubes (CNTs) are shown to be particularly suitable for the purpose. It was found that the total thermal resistance of a branched structure reaches a minimum when the diameter ratio, β* satisfies the relationship: β* = γ-0.25bN-1/k*, where γ is ratio of length, b = 0.3 to approximately 0.4 on the single-walled CNTs, b = 0.6 to approximately 0.8 on the multiwalled CNTs, k* = 2 and N is the bifurcation number (N = 2, 3, 4 ...). The findings of this research provide a blueprint in designing miniaturized electronic devices with outstanding heat dissipation

Evaluating the price effects of two airline mergers in China

This paper compares the price effects of two influential airline mergers taking place in China in 2010. We offer the first comparative analysis of two different types of airline mergers in the Chinese airline market: a parallel merger and a complementary merger. With a difference-in-differences approach, we found that the two types of mergers resulted in similar pricing patterns for the airlines involved in the mergers, suggesting that complementary mergers could also confer an increase in market power. It has been found that the negative impact of high-speed rail on fares gradually weakened after the mergers

Price discrimination and yield management in the airline industry

This chapter introduces the concept of price discrimination and explores how a new airline business model enhances the practice of price discrimination in the Australian airline market. Based on the idea of price discrimination, airlines apply yield management to capture high-yield passengers and at the same time to fill the aircraft with price-sensitive passengers to avoid the flight departing with too many empty seats. This history, recent development, and approaches of airline yield management are presented in this chapter

Analysis of Astringent Components and Differential Gene Expression of Related Key Enzymes in Different Tissues of Fresh Lotus Seeds

This study was performed to explore the differences in the composition of astringent substances in different tissues of fresh lotus seeds and the expression of key enzyme genes involved in the synthesis of astringent compounds. The contents of soluble tannins, insoluble tannins and proanthocyanidins in lotus seed coat, lotus seed pulp without coat and lotus seed plumule were determined. Meanwhile, the activity and gene expression of key enzymes in the tannin synthesis pathway were detected. Sensory evaluation and electronic tongue analysis were performed on lotus seed samples. The data obtained was analyzed by orthogonal partial least squares discriminant analysis (OPLS-DA) and correlation analysis. Results showed that the major substance contributing to the astringency of lotus seeds was soluble tannins. Tannins had a positive effect on its excellent flavor at the waxy ripeness stage. Anthocyanin reductase was a key enzyme affecting the astringency intensity of lotus seeds. SnANR9 played a role in regulating the astringency of different tissues of lotus seeds

Perfect matchings after vertex deletions in n-dimensional lattice graphs

This thesis studies lattice graphs which are readily seen to have many perfect matchings and considers whether if we delete vertices the resulting graphs continue to have perfect matchings. It is clear that one can destroy the property of having a perfect matching by deleting an odd number of vertices, by deleting all the neighbours of a given vertex, etc. Besides these trivial "destructions", in order to guarantee the resulting graph still have perfect matchings, we require the deleted vertices to be mutually far apart. In this thesis, we consider an n-dimensional lattice graph Q(m, n) with bipartition of black and white vertices, where m is even. If the distance of any two deleted black (or white) vertices is greater than 4n(n + l)y/m, then the resulting graph (after vertex deletions) continues to have a perfect matching.Science, Faculty ofMathematics, Department ofGraduat

Essays in transport economics and operations management

This dissertation studies three topics in transport economics and operations management. The first topic is on the economic regulation of congested airports. The second one is revenue sharing between airlines and airports. In the third topic, we investigate the impact of strategic customer behavior on the channel profits. Chapter 2 studies the effects of concession revenue sharing between an airport and its airlines. It is found that the degree of revenue sharing will be affected by how airlines' services are related to each other (complements, independent, or substitutes). It is further found that airport competition results in a higher degree of revenue sharing than in the case of single airports. The airport-airline chains may nevertheless derive lower profits through the revenue-sharing rivalry, and the situation is similar to a Prisoners' Dilemma. Chapter 3 considers price-cap regulation of an airport where the airport facility (e.g., its runway) is congested and air carriers have market power. In the case of airports, there are two versions of price-cap regulation: the single-till approach and the dual-till approach. We show that when airport congestion is not a major problem, single-till price-cap regulation dominates dual-till price-cap regulation with respect to social welfare. Furthermore, we identify situations where dual-till regulation performs better than single-till regulation when there is significant airport congestion. Chapter 4 investigates the impact of customer and firm discounting as well as downstream retailer competition on the benefit of decentralization when customers are strategic. We consider a dynamic two-period model consisting of one manufacturer who sells a product through multiple retailers under linear wholesale price contracts. No firm can credibly commit to future prices or quantities. With strategic customers, we find that a decentralized channel may have higher profit than that of a centralized channel. We show that in addition to the double marginalization effect, both customer and firm discounting and retailer competition are also driving factors of the higher decentralized channel profit.Business, Sauder School ofGraduat