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Compatibility and Interconnection Pricing in the Airline Industry: A Proposal for Reform |
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Bradley H. Weidenhammer [View as PDF]
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114 Yale L.J. 405 (2004)
Where rival firms compete in a network industry, compatibility among all firms maximizes the size, density, and total value of the network by combining rivals into a single network. Applying network-compatibility theory to the airline industry suggests that major carriers have an incentive to thwart interairline compatibility, which they accomplish by making it prohibitively costly for travelers to combine complementary flights on different airlines into a single itinerary. This Note suggests a regulatory regime that would achieve compatibility among airlines, thereby maximizing the value of the air transportation network and enhancing competition in the market for connecting passengers.
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