Impacts of competition on connecting travelers: Evidence from the transatlantic aviation market

Abstract

Abstract: This paper examines the effects of competition driven by low-cost airlines and high-speed rail on long-haul connecting routings. We use passenger, supply and fare data for 2010-2017 on transatlantic routings with a stopover in large European hub airports. Competition from low-cost airlines on the short segments of transatlantic routings reduces the number of connecting passengers channeled by hubbing airlines, who have to pay higher fares. In contrast, airline competition in the long segments of the transatlantic routings does not seem to have a detrimental effect on connecting travelers. Finally, high-speed rail services are not found to lead to a reduction in the number of connecting passengers or to an increase in the price they have to pay.