Abstract
This paper investigates the impact of alliance, cannibalization and network structure on carriers' nonstop entry into transatlantic markets with previously coexisting nonstop and one-stop service. The results show that market concentration measured by international airline alliances and joint ventures has a positive impact on carriers' entry, with the latter presenting a more accurate representation of market concentration in the transatlantic market. Carriers tend to cannibalize their own one-stop product in order to fulfill network cohesion. The three alliances show different manifestations of the cannibalization effect. For example, carriers are less likely to enter the market with nonstop service where one-stop service has already been provided by two carriers belonging to Star alliance. Importantly, network structure more generally also plays a significant role in carriers' entry into the overlapping transatlantic market.
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