Welfare Analysis Of Airline Code Sharing

The airline code sharing become more and more popular.As an important strategic choice of airlines,its existence has important significance.But recent years the Antitrust case on airline code sharing entered into the Antitrust scrutiny.This article mainly explains the essence of the airline code sharing and defines it as a horizontal agreement.Based the comparison of vertical and horizontal code sharing,analyzes the welfare of airline code sharing.In order to provide the corresponding policy implications for antitrust enforcement on the airline code sharing.The welfare effects of code sharing were analyzed from two perspective:(1)analysis of the welfare effects of code sharing from the vertical and horizontal code sharing mode;(2)analysis of the social welfare of horizontal code sharing with the nunber of airline increasing in the airline market.The study found that:the effect code of sharing is divided into three categories,vertical code-sharing increases the total social welfare;in the horizontal code sharing,when the cost do not change,code sharing will reduce social welfare,and with the number of airlines in the market increasing,the reduction of social welfare will decline;in the horizontal code sharing,when the cost of airline changes,code sharing will increase or reduce the total social welfare,which depends on the new cost after code sharing.According to the different welfare effects,antitrust enforcement on airline code sharing has different policy implications.The innovations of this paper:(1)from the prospective of whether the cost change to analyze the welfare of code sharing;(2)in the anylsis of horizontal code sharing,take the number of airline airway into consider to contrast the social welfare effects of airline code sharing when different quantity in the market of airlines.