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Papers by JORGE SILVEIRA
Competition between low cost carriers in rapid expansion and full-service network carriers has re... more Competition between low cost carriers in rapid expansion and full-service network carriers has recently become one of the most relevant issues of the airline industry. The present paper addresses this matter by analysing the entry of the low cost Gol Airlines, in the Brazilian domestic market, in 2001. A route-choice model is estimated by making use of a flexible post-entry equilibrium profits equation and accounting for endogeneity of the main variables. Results indicated the relevance of market size and rival’s route presence as underlying determinants of profitability. Furthermore, the consistency of Gol’s decision making with the pattern of entry classically established by Southwest Airlines for the low cost carrier segment – short-haul and high-density markets – is investigated; evidence is found that although Gol initiated operations by reproducing the standards of Southwest, she quickly diversified her portfolio of routes and, at the margin, became more in accordance with Jet...
Competition between low cost carriers in rapid expansion and full-service network carriers has re... more Competition between low cost carriers in rapid expansion and full-service network carriers has recently become one of the most relevant issues of the airline industry. The present paper addresses this matter by analysing the entry of the low cost Gol Airlines, in the Brazilian domestic market, in 2001. A route-choice model is estimated by making use of a flexible post-entry equilibrium profits equation and accounting for endogeneity of the main variables. Results indicated the relevance of market size and rival’s route presence as underlying determinants of profitability. Furthermore, the consistency of Gol’s decision making with the pattern of entry classically established by Southwest Airlines for the low cost carrier segment – short-haul and high-density markets – is investigated; evidence is found that although Gol initiated operations by reproducing the standards of Southwest, she quickly diversified her portfolio of routes and, at the margin, became more in accordance with Jet...