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Trans. Planning Journal
| Title | An Effectiveness Assessment of Code-sharing Practices among Airlines: A Cooperative Game Approach |
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| Author | Feng-Yeu Shyr, Lin-Wei Chang |
| Summary | In recent years, the competition among airlines has become more vigorous than before. As a result, airlines tend to form alliances to promote their service quality and to enhance their competitiveness. When alliances such as “Star Alliance” and “One World” become dominant, it is more difficult for individual airlines to survive in the competition. Code-sharing agreement is the most popular way among all types of cooperation. There are two different types of code sharing in practice: “parallel” and “complementary”. Parallel cooperation can increase fright frequency, and complementary cooperation can extend the scope of service. The study focuses on the complementary type of code-sharing agreement and uses the game theory to analyze the costs and benefits before and after code sharing. The information can be used for the valuation of the effectiveness of airlines’ code-sharing agreement. There are three major components of the payoff function: the O-D air travel demand model, the load factor model, and the cost model. Based on the estimated payoff function, this research uses the game theory to find the most profitable airfares in different cooperative scenarios. Given the optimal airfares, the corresponded payoff values of the airlines are obtained. Comparison of the profits and consumer surplus under various scenarios are shown in Chapter 7. A case study of the code-sharing practices between Taipei to San Francisco and Taipei to Bangkok is presented to verify the effectiveness of this model. |
| Vol. | 32 |
| No. | 4 |
| Page | 601 |
| Year | 2003 |
| Month | 12 |
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