Abstract
This paper develops an empirical model of the effects of congested airport infrastructure on the market power of airlines, with emphasis on the dominance of slots. By utilizing the parameters of a nested logit model estimated with aggregate data, I develop an econometric model of relative market power for major and medium-sized carriers, aiming at decomposing the determinants of competitive conduct in the market - in particular, the effects of the concentration of flight frequencies on a few major airlines. The behavior of firms in the market is modeled by a static Bertrand-Nash price competition model. I present a discussion of possible effects of a redistribution of slots in favor of smaller carriers, based on the results of the empirical model. Finally, some policy recommendations to the Brazilian air transport are presented.
keywords:
airports; regulation; econometrics
