The Analysis of Impact of Larger Aircraft A-380 on Frequency of Flights

Résumé En

An innovations in airline industry has significant impact on the behavior of its participants: airline companies, airports and passengers. In this paper the innovation that is studied is an introduction of double-deck plane – A-380, which is currently the largest aircraft. Due to its size, it is able to carry at once approximately twice as many passenger as the other medium-sized aircraft, thus, allowing to reduce the frequency, and, as a consequence, induce lower environmental impact. However, in reality, flight frequency depends on many other factors such as airport fees, demand and strategic decision of companies to maximize their profits under competition. Using the monthly panel observations of airline companies over 10 years on 121 routes, we test if the utilization of A-380 leads to the decrease in airline company’s flight frequency. Moreover, we analyze the response of the use of A-380 on the competitors’frequency. We find that increase in usage of A-380 leads to the decrease of company’s own frequency, whereas the competitors have incentive to increase its frequency by differentiating their flights by departure time in order to attract passengers who value the availability of flight at a particular hour.