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Uva-DARE (Digital Academic Repository) UvA-DARE (Digital Academic Repository) A Transaction Cost Analysis of Scheduled international Air Transport of Passengers Ravoo, M. Publication date 2000 Document Version Final published version Link to publication Citation for published version (APA): Ravoo, M. (2000). A Transaction Cost Analysis of Scheduled international Air Transport of Passengers. Universiteit van Amsterdam. General rights It is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s) and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an open content license (like Creative Commons). Disclaimer/Complaints regulations If you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library: https://uba.uva.nl/en/contact, or a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible. UvA-DARE is a service provided by the library of the University of Amsterdam (https://dare.uva.nl) Download date:10 Oct 2021 AA TRANSACTION COST ANALYSIS OFF SCHEDULED INTERNATIONALL AIR TRANSPORT OFF PASSENGERS I I MONIQUEE RAVOO AA TRANSACTION COST ANALYSIS OFF SCHEDULED INTERNATIONAL AIRR TRANSPORT OF PASSENGERS S 1 1 AA TRANSACTION COST ANALYSIS OFF SCHEDULED INTERNATIONAL AIRR TRANSPORT OF PASSENGERS S ACADEMISCHH PROEFSCHRIFT terr verkrijging van de graad van doctor aann de Universiteit van Amsterdam opp gezag van de Rector Magnificus prof.. dr J.J.M. Franse tenn overstaan van een door het college voor promoties ingestelde commissie,, in het openbaar te verdedigen in de Aula der Universiteit opp woensdag 25 oktober 2000, te 12.00 uur doorr Monique Ravoo geborenn te Amsterdam Promotorr prof. dr A. Heertje Co-promotor:: prof. drs J.B. Polak, emeritus Faculteit:: Economische wetenschappen en econometrie Preface e Too many people, air transport resembles the world of Peter Stuyvesant: glamorous, adventurous and tingedd wim danger. Even if environmental damage and a number of accidents have somewhat changed matt image, air transport still has a trace of the spectacular. The image confirms the idea that 'the pleasuree of travelling is in the journey.' Travellingg inside, as you do when writing a doctoral thesis, indeed generates pleasure but also pain: thee 'pain' of tracking down «formation, clarifying key questions, developing a model, refining knowledgee of fundamental economics, working hours on end, rethinking, rewriting, checking, editing...and,, finally, seeing light at the end of the tunnel but not seeing it come closer. Even worse, beingg m the light for a short while, only to discover that there is another tunnel ahead. When I began mis thesiss more than five years ago, I could never have imagined what lay ahead of me. Whyy would anybody m their right minds embark on a thesis, you may ask? Well, because there is also pleasuree ahead. Finding that pleasure requires a strong interest in the subject of investigation. Speaking forr myself, this was certamry the case, wfth a job at Schiphol at the time and a father who had worked theree since I was two years old. To my first memories belong walking with my dad in the Amsterdam woodss and finishing our walk drinking a cup of cocoa at parking lot P3. Who would have thought thenn ? Writingg a thesis gives pleasure when assumptions are confirmed, new thoughts spring to mind, the scopee for improvement becomes clear, or a line of reasoning appears sound: the 'aha erlebnis'. The journeyy has taken me more than five years. It has both cost me and given me a lot. Now uiat me journey hass ended, I'm glad mat it's over. Theree are many people who have in one way or another helped me to continue my trip. I am indebted to myy supervisors, Professor Heertje and Professor Polak, for providing me with the inspiration needed to conductt research. They were able to extract the best from me through a unique combination of knowledge,, character and incentives. I also wish to mention Professor Wassenbergh, the well-known professorr of air law at Leyden University, who showed me and my fellow students some years ago how challengingg a course in air law could be. And how you should not proceed from 'what is' but be willing too turn your mind to 'what can be'! The term 'lege fèrenda' should sound familiar to all those who have hadd die opportunity to attend his classes. Thanks are due to my 'paranimfen' - Jacques, who read a lot aboutt what his job implied but didn't fail to act upon k, and Rene, who was busy developing his businesss but always found time to give advice on a whole range of matters - and bom their wives, Dady andd long-time friend Sandra. Jan-Willem, explained a lot to me about the publishing business and was alwayss willing to talk about it over dinner somewhere. -i-- Family,, friends and colleagues, especially my former employer, Schiphol Group, did not always understandd what I was doing (and why I didn't do all the things a young woman is supposed to do), but sometimess provided great insight into my motives for writing a thesis. Their opinions helped me grow duringg my research. II certainly need to mention Ivette at this point, who was able with bottomless energy and insurmountablee logic to point out the not so logical parts of both my English and my reasoning. Often, thee solution to our discussion was to delete a sentence. We became masters at leaving things out, notwithstandingg that the book has still reached more than 200 pages! AWiough it may have seemed as if II did not like our discussions, this may have been due more to frustration on my side than anything else. Again,, I learnt a lot. Lastt but not least, I am greatly indebted to Jan, who facilitated and supported the journey in many ways.. Words fail me here. It's good to know that we have some real travel ahead of us. Moniquee Ravoo Amstelveen,, September 2000 -11 1 Contents s Preface e l l Tablee of abbreviations and acronyms vii i P«fe e Chapterr I Introducbon n 1.11 - Objective of the thesis 1.22 -Context of the thesis 1.33 - Central questions 1.44 -Methodology 1.55 - Scope of the thesis 1.66 -Organisation of the diesis Chapterr II Transactionss and transaction cost .n»tv<^ 2.11 - Introduction 9 9 2.22 Transactions 9 9 2.33 - Transaction costs 12 2 2.44 - Factors influencing transaction 15 5 2.4.11 -Frequency 15 5 2.4.22 - Uncertainty 17 7 2.4.33 - Asset specifiry 19 9 2.4.44 - Bounded rationality 21 1 2.4.55 - Opportunism 22 2 2.55 - Effectiveness 27 7 2.66 Industry environment 31 1 2.77 - Governance structures 31 1 2.7.11 - Non-specific structure 31 1 2.7.22 - Semi-specific structure 32 2 2.7.33 - Transaction-specific structure 33 3 2.7.3.11 -General comment 33 3 2.7.3.2-Thee 6nn 34 4 2.7.3.33 -TheState 35 5 2.88 - Concluding remarks 40 0 Chapterr m- Thee Bilateral stmchms 3.11 n 42 2 3.2-Bilateralism m 45 5 3.3-Partiess to the transaction 50 0 3.3.1-States s 50 0 3.3.1.1-- Psychological goal 51 1 3.3.1.22 - Financial goal 52 2 3.3.1.3-Politicall and social goal 54 4 3.3.1.44 - Implementation of the air transport goal in the Bilateral structure 56 6 3.3.1.4.11 - Traffic votume 57 7 3.3.1.4.22 * Fleet composition 57 7 3.3.1,4.3-Markett behaviour 58 8 3.3.1.55 - Interstate relations 59 9 3.3.22 - Airlines 59 9 3.3.33 - Airports 64 4 3.3.4-Internationall organisations 69 9 3.44 - The object of the exchange and property rights 71 1 3.5-Thee transaction process 75 3.5.11 -Contact phase 75 3.5.22 - Contract phase 76 6 3.5.33 n phase 78 8 3.5.44 - Compliance and enforcement 80 0 3.66 - Characterization of the Bilateral structure 83 3 3.77 - Further developments g4 Chapterr IV- The Community structure 4.1'Introductionn 37 4.22 - European integration, EC Treaty and air transport 89 9 4.33 - European air transport packages 95 5 4.44 - Current Community structure 95 4.55 - Parties to the transaction 99 4.5.1-- EC Commission 99 9 4.5.22 - EC Council of Ministers 100 0 4.5.33 - EC Parliament 102 2 4.5.4-ECCourts s 102 2 4.5.55 - Objectives of the EC institutions 104 4.5.66 - Member States 105 5 4.5.6.11 - General remarks 105 5 4.5.6.22 - Implementation of the air transport goal in the Community structure 109 4.5.6.2.11 - Traffic volume 109 9 4.5.6.2.22 - Fleet composition 109 9 4.5.6.2.33 - Market behaviour 109 9 4.5.6.33 - Interstate relations 110 0 4.5.77 - Community carriers U2 4.5.88 - Community airports U5 4.5.99 - International organisations Hg 4.66 - The object of the exchange and property rights 119 4.77 - The transaction process 120 4.7.1-Contactt phase 120 4.7.22 - Contract phase 120 4.7.33 - Execution phase 126 4.7.4-- Compliance and enforcement 128 4.88 - Characterization of the Community structure 130 4.99 - Further developments 131 Chapterr V - Comparison of the Bilateral «id Cmnmmiiiv structures 5.1-Introductionn 133 5.22 -Characteristics of and trends the air transport industry 134 5.2.1-Internationall nature 134 5.2.22 - Co-operation 134 5.2.33 - State intervention and deregulation 13g 5.2.44 - Industry environment 139 5.2.55 - New market players 141 1 5.33 - Core dimensions 141 1 5.44 - Features of the Bilateral structure 143 5.5-- Effectiveness of die Bilateral structure 145 5.66 -Transaction cost efficiency of the Bilateral structure 147 5.6.11 - Transaction frequency 147 5.6.22 - Uncertainty 149 5.6.33 - Asset specificity
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