Incumbent responses to low-cost airline entry and exit: A spatial autoregressive panel data analysis

While the US airline industry has been substantially transformed in recent years by the growth of low-cost airlines, the cost-saving benefits of lower airfares are difficult to gauge empirically. There are two important ways in which this paper contributes to the existing literature on the impact of the low-cost carriers (LCCs). First, the availability of route-level panel data allows us to examine the role of the LCCs in the long-run adjustment of airfares as well as the responses of the incumbent carriers to LCC entry and exit in a dynamic setting. Second, we capitalize on recent developments in spatial econometrics and explicitly model the spatial dependence among adjacent airline routes, an issue often ignored by previous studies. Although most of the pro-competitive effects of LCC entry take place after entry, we find evidence that the incumbent carriers also cut airfares in anticipation of entry by the LCCs. Moreover fares remain lower even after Southwest Airlines exits. Our empirical analysis confirms the spatial dependence among airfares in adjacent routes, provides estimates of the consumer benefits from lower airfares in routes affected by LCCs, and shows that there are substantial indirect benefits, i.e. lower fares in spatially-linked, nearby routes.     

Measuring the effect of low-cost carriers on regional airports' commercial revenue

This paper measures the effect of low-cost carriers (LCCs) on British regional airports' commercial revenue using panel data analysis. The evidence shows that although LCCs have significant impact on airports' commercial revenue, their contribution is smaller compared to other carriers. The empirical results indicate that holding other variables constant, on average, each additional LCC passenger boosts airport commercial revenue by £2.87, while each additional other carrier passenger raises commercial revenue by £5.59. These results are relatively stable across different models. The findings have important policy implications for aviation strategy at the regional level and beyond.     

Some insights into competition between low-cost airlines

The phenomenon of the wide world growth in low-cost airlines has resulted in a focus on their pricing strategies, on issues of cost recovery and on their impact on the traffic and market shares of legacy carriers or other low-cost carriers when they are in competition, either directly or at adjacent airports.This paper provides a brief overview of the characteristics of these low-cost carriers as well as their history and geography. It goes on to outline ways in which these carriers compete and manage demand, ranging from price competition to advertising; some of these methods directly reflect their special characteristics. Some empirical evidence is presented which indicates a correlation in fare setting behaviour between competitors and insights are offered on cost recovery.The impact of the start-up of low-cost carriers is also analysed, focusing on their impacts on other low-cost carriers. The case of Ryanair competing with easyJet on London-Venice is examined along with Southwest and Frontier on Denver-Las Vegas.     

Climate change and the prospects of increased navigation in the Canadian Arctic

There is wide recognition that the process of climate change may be affecting the Arctic region at a faster pace than other regions. What is uncertain is the full impact of climate change on ice cover, and in particular whether there will be a significant decrease of summer ice from the current three months to a longer period and accompanied by navigation conditions suitable and safe for commercial shipping. New international navigation routes through the Canadian and Russian Arctic sectors could significantly reduce the length of sea voyages from Asia to North America and Europe. However, on the basis of what is known to date, there are significant differences of view as to the feasibility of international commercial navigation in the Northwest Passage.     

Can long-haul low-cost airlines be successful?

A key question is whether the very successful, largely short-haul LCC business model can work over long-haul sectors? This paper compares the cost and other advantages of LCCs and evaluates how far they might be applied to long-haul sectors. It is estimated that cost advantages might be much lower than the 50-60% on short-hauls. Other factors such as the adoption by network airlines of some LCC features and their likely competitive response, the limited potential for market stimulation, the need for dense markets and feed traffic all combine to cast doubt on the widespread establishment of the business model for long-haul flights.     

Organisational structures and functions in Bus Rapid Transit,and opportunities for private sector participation

Over the past two decades, Bus Rapid Transit (BRT) has become an established transportation technology, which delivers high quality, high capacity transit at much lower cost than rail-based modes. Although initially associated with South America, it is now global with a wide array of implementations in Asia, Africa, North America, Australia, and Europe.     

Vulnerability analysis of global container shipping liner network based on main channel disruption

The Malacca Strait, the Suez Canal and the Panama Canal play an important role in the global container shipping. To study the impact of main channel interruption on the container shipping, we analysed statistical data on all routes operated by the top 100 global container liner companies and constructed a network model. We selected four topological metrics to measure the network’s connectivity and used the network weekly total shipping capacity and average shortest shipping time to measure the network’s transportation capacity and transportation time. The interruption of the main channel is simulated, and the changes in the metrics are analysed. The results indicated that the network’s vulnerability is sensitive to main channel interruption. If the Malacca Strait is interrupted, the network’s prosperity degree fall by almost half and the network’s transportation time increase by more than a quarter if the Suez Canal is interrupted. In addition, East Asian and European container liner shipping have more than 50% dependence on the Malacca Strait and the Suez Canal. Moreover, the container transport time between ports in East Asia, Europe, and North America and the rest of the world increases by an average of 4–9 days in the main channel interruption.     

Yard operations in the container terminal-a study in the 'unproductive moves'

Research that examined the land utilization of the container terminals in a global perspective revealed that the land utilization planned and achieved by Asian container terminals are much higher than the terminals in western Europe and North America. From the operational point of view, this has led to the question: 'what are the impacts of these strategies in land utilization on the yard operations?' This has subsequently led the research study to focus on the yard operations within the container terminal.     

Governance of Shipping Emission of SOx in China's Coastal Waters: The SECA Policy,Challenges, and Directions

Emission governance of air pollutants from ships is a common challenge for the world's shipping industry. Under the framework of the International Maritime Organization (IMO), Europe, North America, and other developed regions and countries have established strict ship Emission Control Areas (ECAs). With some of the largest ports in the world, China suffers severe air pollution from ships, posing a threat to the air quality and public health of the coastal cities. To strengthen the control and supervision over air pollutants, such as ship-emitted sulfur oxides (SO_x) in coastal areas, China issued a Sulfur Emission Control Area (SECA) policy for ships in January 2016. However, the new SECA policy lags far behind IMO's existing ECA policies, and continues to face many challenges during implementation. This paper outlines the main framework of China's ship SECA policy, analyzes the legal governance basis, discusses major potential challenges for implementing the policy, and puts forward suggestions for future governance. This research aims to promote the effectiveness of China's sulfur emission-reducing SECA policy by putting forth novel ideas for policymakers and stakeholders.     

Spatial heterogeneity of ports in the global maritime network detected by weighted ego network analysis

More extensive attention has been paid to the heterogeneity of maritime transport network in topological rather than in spatial aspects. However, the importance of links and the roles of neighbors of a node has been ignored if not all. To fill this gap, this article introduced the approach of weighted ego network analysis (WENA) to visualize the spatial heterogeneity of the maritime network at global and local levels. The topological connectivity graph of the global marine network was derived, and its structural properties were analyzed. It is found out that the values of the degree of ports follow power-law distribution, which indicates that the global marine network is scale-free, that is, there are few well-connected ports and a majority of less connected ports. The spatial disparities of the network can be described by a core–periphery pattern. In global, most of the hubs or ports with extremely high values of degree locate in the big-three maritime regions including Far East, North America, and West Europe. Along the peripheral belts of the three regions, there are lots of less connected small ports. A different hierarchical structure of six continents was captured by WENA. It is found that Europe, Asia, North America, and Africa showcase a pyramid-shaped hierarchical structure with a scale-free feature similar to the entire network, while South America and Oceania exhibit the fusiform hierarchy like small-world networks. It is proposed that such spatial inequality and heterogeneity were caused by the geographical environments such as the hub-and-spoke organization, the embedded trade pattern, and the proximity of location. These findings help us to understand the characteristics of the international trade pattern and shed light on the strategies of development for the industry stakeholders.     

Development of and prospects for cruising in Europe

This paper evaluates the development of prospects for cruising in Europe. It examines this within the broad framework of economic theory and maritime economics. Initially, the market structures and relationships applicable to cruising are considered with particular attention being paid to the linkages between the shipping markets and tourism and leisure. This conceptual analysis suggests that whilst cruising has a strong shipping element it does not fall exclusively within the classic framework of maritime economics but draws from both shipping and tourism and leisure. For reasons of clarity, a number of definitions are also provided covering maritime tourism and leisure, cruising, and supply and demand, as it relates to cruising. Following this, an overview of the cruise industry is included. This focuses primarily on the growth in the demand both world wide and at regional level. In particular, the analysis places the development of cruising in Europe in market perspective. Subsequently, the development of cruising in the UK is examined as a case study. Initially, UK market growth is analysed and it can be seen that the UK is now the second largest cruise market in the world after North America. Projections of the growth in UK demand to 2003 are also provided. The growth in supply is also studied and the UK targeted fleet is identified. In addition, the question of ownership is addressed. The prospects of employment for UK seafarers within the cruise industry are also considered and results obtained from the analysis suggest that it should be possible to increase the participation of UK and other European seafarers within the cruise industry at all levels and in all departments. In the final section of the paper, the position of UK ports as terminals and destinations is evaluated. It is concluded that the fundamentals of the cruise business remain strong, and continued growth by the industry should be possible for the foreseeable future.     

Development of and prospects for cruising in Europe

This paper evaluates the development of prospects for cruising in Europe. It examines this within the broad framework of economic theory and maritime economics. Initially, the market structures and relationships applicable to cruising are considered with particular attention being paid to the linkages between the shipping markets and tourism and leisure. This conceptual analysis suggests that whilst cruising has a strong shipping element it does not fall exclusively within the classic framework of maritime economics but draws from both shipping and tourism and leisure. For reasons of clarity, a number of definitions are also provided covering maritime tourism and leisure, cruising, and supply and demand, as it relates to cruising. Following this, an overview of the cruise industry is included. This focuses primarily on the growth in the demand both world wide and at regional level. In particular, the analysis places the development of cruising in Europe in market perspective. Subsequently, the development of cruising in the UK is examined as a case study. Initially, UK market growth is analysed and it can be seen that the UK is now the second largest cruise market in the world after North America. Projections of the growth in UK demand to 2003 are also provided. The growth in supply is also studied and the UK targeted fleet is identified. In addition, the question of ownership is addressed. The prospects of employment for UK seafarers within the cruise industry are also considered and results obtained from the analysis suggest that it should be possible to increase the participation of UK and other European seafarers within the cruise industry at all levels and in all departments. In the final section of the paper, the position of UK ports as terminals and destinations is evaluated. It is concluded that the fundamentals of the cruise business remain strong, and continued growth by the industry should be possible for the foreseeable future.     

Airline network competition: Full-service airlines, low-cost airlines and long-haul markets

The paper discusses airline network competition. Low-cost airlines and conventional airlines have distinctly different strategies and network types. This determines their ability to compete with other airlines in specific markets. The paper discusses the lack of competition between conventional airlines in local markets, and sees why low-cost airlines are the primary source of competition in such markets. Conventional airlines are relatively strong on long-haul markets, using their networks to keep costs per seat relatively low. Charter airlines show that a long-haul low-cost strategy is feasible For scheduled low-cost airlines, this may be more difficult, but this does not automatically mean that low-cost airlines cannot enter thick long-haul markets.     

The polarization of global container flows by interoceanic canals: geographic coverage and network vulnerability

It is widely acknowledged that the two major interoceanic canals of Suez and Panama play a central role in global shipping flows. However, this role has rarely been measured with precision both in terms of the geographic coverage and network topological properties of canal-dependent flows. Based on vessel movement data for containerships, this research clarifies the weight and share of canal-dependent flows globally and at the level of world regions, routes, and ports. It also estimates and maps the effects of removing canal-dependent flows from the network by means of graph-theoretical methods. While main results converge in showing a decreasing importance of canal shipping in the context of growing south-south trade exchanges, certain areas remain more dependent than others, such as Asia, Europe, and North America. The research also underlines factors of port vulnerability across the globe in relation with the two canals.     

Causes and effects of FDI by the Norwegian maritime industry

This paper analyses foreign direct investments (FDI) in Asia by the Norwegian maritime industry. It focuses on three topics: (1) Why do Norwegian maritime companies invest abroad? (2) What are the effects of maritime foreign direct investments on the Norwegian maritime milieu? (3) What are the effects of these investments on the host country? By analysing specific Norwegian maritime companies, it was found that the FDIs have partly been induced by the instability of the Norwegian policy towards this sector. Several firms also point at the importance of being closer to the Asian market as a significant reason for FDI, and the Norwegian ship equipment industry tends to 'follow' the shipping companies abroad. The domestic effects of FDI are uncertain, and are likely to depend on the motivation behind the investments. Finally, using Singapore as an example, it is argued that the host country effects of FDI tend to be positive.     

The environmental costs and economic implications of container shipping on the Northern Sea Route

The Northern Sea Route (NSR) has tremendous potential for ocean shipping between Europe and Asia due to the savings from shorter transit time and distance. However, the Arctic area is environmentally vulnerable and thus there is a trade-off between NSR’s impacts on environment vs. its economic benefits, especially when compared with the traditional route, such as through the Suez Canal Route (SCR). This study estimates the market shares of different transport modes and alternative shipping routes for the container transport market between Europe and Asia, and the resulting environmental costs. Our result suggests that NSR can be a viable option under the status quo. However, its environmental costs tend to be higher than SCR due to small ship size and low load factor in the present, thus the development of NSR would lead to worse environment outcomes. If these issues can be resolved, NSR can benefit from lower operational and environmental costs, which will lead to higher market share and social welfare. Otherwise, increased use of NSR may lead to higher total environment costs than the status quo.     

On the development of public transit in large cities

This article presents a summary of the analyses and set of recommendations given by a committee of transit specialists gathered by the Minister of Transport of Chile aiming at improving Transantiago, the new transit system recently inaugurated for Santiago. This summary focuses on those recommendations directed towards improving the efficiency, service quality and sustainability of mass public transportation systems in major cities in the developing world and that could be implemented in a short term (within two years). Three broad dimensions of public transit are considered: competition and regulation; investment, financing, fares and subsidies; and the operation and use of infrastructure, design, inspection and control. Although the study grew out of the needs and characteristics of a city such as Santiago (Chile), and of the virtues and deficiencies of Transantiago, much of the analyses and recommendations could be adopted and implemented in the major cities of developed countries in Europe, North America and Asia.     

影响中国船员走向国际劳务市场因素的研究

提高船员的整体素质和参与全球船员劳务市场竞争的能力,可以向海外市场输出大量优质的海员,加快中国海员进军欧美劳务市场的步伐,进一步增强我国海员走向国际劳务市场外派行业的竞争力。     

中、美、欧岩土工程勘察规范差异性分析

开展了中、美欧岩土工程勘察规范差异性研究。采用分类比较法,研究分析中国标准和美欧标准在室内土质分类、现场原位测试方法存在的相同点和差异性。中、美、欧在岩土规范的独立性和集成度等方面均存在差异,但有着更多的共同点,从工程实践的发展来看,它们最终将会走向统一。     

Impact of scale increase of container ships on the generalised chain cost

In recent years, an increase in the size of the container ships could be observed. The question is how these larger ships will influence the total generalised costs from a port of loading to a destination in the European hinterland. The second question is whether a scale increase of the container ships on other loops, such as a loop from the United States to Europe, has the same impact on the generalised chain costs as on the loop from Asia to Europe. A derived question is which element of the total chain has the highest importance, and whether this balance varies as the ship size changes. In this article, a model is developed that allows answering the above research questions. The model is designed to simulate the cost of a complete loop of a container ship and of a chain that uses that same loop. For the chain cost simulation, the maritime part is determined by the loop. From the ports of loading and unloading, the port container handling and the hinterland transportation costs are also integrated. The model also allows calculating the total chain cost from a point of origin (either a hinterland region or a port) to a destination point (also a port or a hinterland region). An actual container loop of a container shipping company can be introduced in the model. An application is made to two existing container loops, namely from Asia respectively the United States to Europe. It turns out that changing ship does indeed lead to economies of scale, but also that the impact is larger on the Asia–Europe connection than on the US–Europe connection. Furthermore, the maritime component has the biggest share in the total chain cost, but as ship size increases, the shares start getting closer to each other. This research contributes to the existing literature in two ways. First of all, it quantifies the impact of the scale increase of container ships throughout the total chain. Second, this is done from a bottom-up engineering modelling approach.