May 6, 2011
Technology, Business Models and Network Structure in the Airline Industry
Blog readers may be interested in Xavier Fegeda & Ricardo Flores-Fillol's paper, Technology, Business Models and Network Structure in the Airline Industry (XREAP Working Paper No. 2010-14, Dec. 2010) (available from SSRN here). From the abstract:
Network airlines have increasingly focused their operations on hub airports through the exploitation of connecting traffic. This has allowed them to take advantage of economies of traffic density, the existence of which is beyond dispute in the airline industry. Less attention has been devoted to airlines' decisions on thin point-to-point routes, which can be served using different aircraft technologies and different business models. This paper examines, both theoretically and empirically, the impact on airlines' networks of the two major innovations in the airline industry of the last two decades: regional jet technology, and the low-cost business model. We show that, under certain circumstances, direct services on thin point-to-point routes can be viable, and that as a result airlinesmay be interested in diverting passengers away from the hub.
May 4, 2011
The EU and ATM Modernization
The Wall Street Journal has a detailed story on the European Union's Single European Sky (SES) program. See Daniel Michaels, Sky Wars: Europe Battles to Erase Borders in the Air, Wall St. J., May 4, 2011 (available here). As the story makes clear, despite the renewed impetus given to the program following last year's "Volcanic Ash" crisis, inter-governmental squabbling among the EU Member States remains an issue. Unsurprisingly, the airline industry's lead global trade group, the International Air Transport Association, has been unimpressed by the glacial pace of ATM modernization in the EU.
Though only lightly addressed in the story, it should be made clear that U.S. efforts to upgrade its own ATM system, the so-called "NextGEN" initiative, faces its own challenges. The House and Senate have yet to agree on legislation to further fund NextGEN and organized labor, fearful that ATM modernization will yield job losses, are expected to resist efforts to fasttrack the project. Even so, the U.S. and EU have pledged to cooperate on their modernization efforts to ensure interoperability once their respective systems are fully functional. See Memorandum of Cooperation, NAT-I-9406, U.S.-EU, June 17, 2010, 2011 O.J. (L 89) 3.
Blog readers interested in learning more about the legal and political challenges to ATM modernization will find detailed discussions of these issues in Brian F. Havel and Gabriel S. Sanchez's forthcoming book, The Principles and Practice of International Aviation Law. Moreover, Professor Havel's analysis of U.S. views on the SES initiative will be published later this Spring.
May 3, 2011
The New York Times ran a story in yesterday's edition on the alleged clout of airline alliances. See Susan Stellin, The Clout of Air Alliances, N.Y. Times, May 2, 2011 (available here). Written more for travelers than business or legal analysts, the story does a good job summarizing the history and benefits of alliances, while putting up the usual warning signs that these ventures adversely affect competition.
May 1, 2011
New Issue of IALP
The Spring 2011 issue of the International Aviation Law Institute's flagship publication, Issues in Aviation Law and Policy, has gone to press and will soon be available to subscribers or those interested in purchasing individual issues. The following papers will appear in the issue:
Hon. Gerald L. Baliles, Commentary, Time Flies: Observations about the Decade Past, and a Look Toward the Future
Matt Andersson, Commentary, The Impact of Policy on Global Aircraft Manufacturing and Development
P. Paul Fitzgerald, Europe's Emissions Trading System: Questioning its Raison d’Etre
David E. Rapoport & Michael L. Teich, The Erosion of Secrecy in Air Disaster Litigation
James L. Devall, The U.S. and EU Approaches to Global Airline Alliances: Cooperation or Conflict
Allan I. Mendelsohn, Foreign Plaintiffs, Forum Non Conveniens, and the 1999 Montreal Convention
Steven H. Resnicoff, Shooting Down Suicide Airplanes--What's Law Got to Do With It?
Douglas M. Marshall, Civil, Public, or State Aircraft? The FAA's Regulatory Authority Over Government Operations of Remotely Piloted Aircraft in U.S. National Airspace
Isaku Shibata, Airfield Management of High-Density Airports in Metropolitan Areas--A Study of Narita International Airport
Stuart A. Hindman, Full-Body Scanners: TSA's New "Optional" System for Airport Searches
Readers interested in learning more about the journal, including subscription information, can do so through the Institute's website here.