Intermodal Competition in the Brazilian Interstate Travel Market

Authors

  • Frederico Araújo Turolla Escola Superior de Propaganda e Marketing and Fundação Getúlio Vargas image/svg+xml
  • Moisés Diniz Vassallo Núcleo de Estudos em Competição e Regulação do Transporte Aéreo, Instituto Tecnológico de Aeronáutica image/svg+xml
  • Alessandro Vinícius Marques de Oliveira Núcleo de Estudos em Competição e Regulação do Transporte Aéreo, Instituto Tecnológico de Aeronáutica image/svg+xml

Keywords:

air transportation, intercity coaches, industrial organization, intermodal competition, Brazil

Abstract

This paper presents a test of intermodal interaction between coaches and airlines in Brazil in order to check for the efficacy of recent liberalization measures designed to promote competition in both industries. Interstate travel service in the country is heavily provided by coaches, and the system is fully operated by the private sector under public delegation through permits and authorizations. Agency-based regulation was introduced in 2002 along with a price cap regime aimed at enhancing the flexibility to change fares in response to demand and cost conditions. By making use of a reaction function-based model of coach operators’ pricing decisions in the interstate travel market, we then estimate the sensitivity of the changes in coach fares to the changes in airline fares in a simultaneous-equation framework. Intermodal interaction among coach operators and airlines is found to be highly significant and probably due to the competition for a small but increasing set of premium, quality-sensitive, coach passengers.

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References

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Published

2008-04-30

How to Cite

Araújo Turolla, F., Diniz Vassallo, M., & Vinícius Marques de Oliveira, A. (2008). Intermodal Competition in the Brazilian Interstate Travel Market. Economic Analysis Review, 23(1), 21–33. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/75

Issue

Vol. 23 No. 1 (2008)

Section

Articles

License

Copyright (c) 2008 Frederico Araújo Turolla, Moisés Diniz Vassallo, Alessandro Vinícius Marques de Oliveira

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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