Complementary Alliances with Endogenous Fleets and Load Factors
Tinbergen Institute Discussion Paper 15-134/VIII
30 Pages Posted: 20 Dec 2015 Last revised: 11 Apr 2016
Date Written: January 3, 2016
This paper analyzes the effect of carrier collaboration on fleet capacity, fleet structures in terms of the number and the size of vehicles, and load factors. The model features complementary networks, scheduling, price elastic demands, and demand uncertainty. For the case of a given number of vehicles, the analysis shows that carrier collaboration increases vehicle sizes (thus, fleet capacity) if marginal seat costs are low while fleet capacity remains unchanged if marginal seat costs are high. If both vehicle sizes and vehicle numbers can be varied, then collaboration will always increase vehicle numbers and fleet capacity, while the effects on vehicle sizes and, thus, also load factors, are ambiguous and therewith hard to predict. Numerical simulations indicate that collaboration increases expected load factors also when the number of vehicles is endogenous.
Keywords: Alliances, fleet capacity, load factors, scheduling, uncertainty
JEL Classification: L40, L50, M21, R42, R49
Suggested Citation: Suggested Citation