A comparative analysis of the air transport liberalization and global airline alliances on market concentration

Abstract

As a leading aviation country in the world, the U.S. has open skies agreements with more than 120 countries around the world. In the last twenty years, the three global alliances – Oneworld, Star and Skyteam has grown in parallel with the increased air service liberalization. In 2019, these three global alliances carried about 44% of global passenger traffic, while earning about 66% of global airline revenue. The transatlantic market is highly concentrated among the three global alliances, having 80% of market share on the routes between the U.S. and Europe. Using the three alliances as focal groups, this paper will investigate market concentration on non-stop international routes to and from the U.S. under open-skies and non-open-skies agreements. The key research question addressed will be: whether and to what extent the growth of global alliances may lead open-skies routes to be less competitive as compared to those non-open-skies routes. Policy implications will be drawn and discussed based on the findings of the study

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