Restraints on competition in the Russian air passenger market

Authors

  • Сергей Александрович Лукьянов State University of Management, 99, Ryazansky pr., Moscow, 109542, Russian Federation; Ural Federal University, Graduate School of Economics and Management, 19, Mira ul., Yekaterinburg, 620000, Russian Federation; St. Petersburg State University, 7–9, Universitetskaya nab., St. Petersburg, 199034, Russian Federation https://orcid.org/0000-0002-0736-1533
  • Людмила Станиславовна Ружанская Ural Federal University, Graduate School of Economics and Management, 19, Mira ul., Yekaterinburg, 620000, Russian Federation
  • Елена Семеновна Авраменко Ural Federal University, Graduate School of Economics and Management, 19, Mira ul., Yekaterinburg, 620000, Russian Federation
  • Владимир Витальевич Строев State University of Management, 99, Ryazansky pr., Moscow, 109542, Russian Federation

DOI:

https://doi.org/10.21638/11701/spbu05.2018.107

Abstract

This article discusses the results of a continuous study of Russian domestic air carriers conducted in 2006-2016 and analyzes the main barriers to entry into the passenger air travel market and their impact on competition in this field. There are significant structural barriers that prevent companies from entering this market. This situation challenges the existing concept and the idea of the domestic air transportation market as a quasi-competitive one. To describe the structure of the Russian passenger air transport market, we introduce the notion of “discrete competition,” reflecting shifted density of market concentration towards small regional airlines. The latter are usually united by ownership mechanisms or affiliation with an airport. They possess considerable market power, but at the same time have an insignificant market share in the overall Russian passenger air market. Administrative barriers also play a crucial role in restraining competition. Furthermore, current institutional conditions are favourable for vertical "airport - airline" integration which results in a fundamental transformation, as described by Williamson, and can be detrimental to competition. As our research findings have shown, there is a trade-off between existing vertically integrated structures in the air passenger market and public welfare.

Keywords:

entry detergents, market structure, competition policy, discrete competition, antitrust regulation

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Author Biographies

Сергей Александрович Лукьянов, State University of Management, 99, Ryazansky pr., Moscow, 109542, Russian Federation; Ural Federal University, Graduate School of Economics and Management, 19, Mira ul., Yekaterinburg, 620000, Russian Federation; St. Petersburg State University, 7–9, Universitetskaya nab., St. Petersburg, 199034, Russian Federation

Doctor of Economics, Professor

Людмила Станиславовна Ружанская, Ural Federal University, Graduate School of Economics and Management, 19, Mira ul., Yekaterinburg, 620000, Russian Federation

Doctor of Economics, Professor

Елена Семеновна Авраменко, Ural Federal University, Graduate School of Economics and Management, 19, Mira ul., Yekaterinburg, 620000, Russian Federation

PhD in Economics, Associate Professor

Владимир Витальевич Строев, State University of Management, 99, Ryazansky pr., Moscow, 109542, Russian Federation

Doctor of Economics, Professor

References

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Вестник Санкт-Петербургского университета. Экономика, 2018, 34 (1)

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Published

2018-03-30

How to Cite

Лукьянов, С. А., Ружанская, Л. С., Авраменко, Е. С., & Строев, В. В. (2018). Restraints on competition in the Russian air passenger market. St Petersburg University Journal of Economic Studies, 34(1), 134–148. https://doi.org/10.21638/11701/spbu05.2018.107

Issue

Vol. 34 No. 1 (2018)

Section

Economics of Industries and Sectors

License

Articles of the St Petersburg University Journal of Economic Studies are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.