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Impact of Competition Enhancing Air Services Agreements: A Network Modelling Approach

Staff research paper

This paper  by Tendai Gregan and Martin Johnson was released on 19 July 1999. The research paper supplements appendix F (Impact of Liberalised International Air Services Agreements) of the inquiry report, International Air Services.

It provides the technical details to the model developed in the course of the Commission's inquiry. This paper is directed to a technical audience. Policy details and institutional information are found in the Inquiry report.

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Contents

Preliminaries
Cover, Copyright, Table of Contents

Theoretical framework
Demand for air services
Airline networks
Airline behaviour

Model parameters
Supply parameters
Demand calibration

Economic welfare estimates

Effect of Ansett International's entry
Results

Effects of a plurilateral openclub
Network effects in open clubs and modelled scenarios
Limitations of open club scenarios and their implications
Results for Australian markets

References

Appendix
Validation and sensitivity simulations
GAMS program for network Ansett simulations base model