Rationalization of the European air net

Abstract

This paper investigates the question of whether it might be possible to rationalize, that is to increase the quality of service for a given cost, the airline network within Europe. Various policy analysts, have suggested that significant benefits might be achieved along these lines if the Common Market were to reduce the bilateral restrictions on European airlines. Our conclusion is that this is not the case. A main interest of this paper should be the approaches we propose for analyzing transport nets. First, we argue that, when one considers the multidimensional output of scheduled service, we should recognize that economies of scale do exist even for transport modes which are ordinarily not thought to have this characteristic. This provides an important motivation for concentration of services, as does in fact exist. Second, we propose a measure of network connectivity which takes into account the intensity of connections between the nodes. This measure permits a much more precise discussion of the nature of any transportation network.