The effect of cooperative infrastructure fees on high-speed rail and airline competition.

This paper explores the effects of cooperation between rail and air infrastructures in setting per-passenger fees prior to competition among airlines and high-speed rail (HSR) in a transport network. It is shown that, for a sufficiently low degree of substitution, cooperation results in lower fees and greater HSR traffic than under competition. Besides, it leads to more connecting passengers. An empirical application allows for a quantitative assessment of cooperation. Gains to passengers and operators are sizeable when cooperation either involves all infrastructure managers or the rail and the hub airport managers. Welfare gains are in the range of 10.4–11.1%. Our contribution offers an ex-ante analysis about the benefits of intermodal cooperation at the upstream level. • An integrated intermodal network involves rail and air infrastructure providers. • Upstream cooperation may lead to lower fees and more rail traffic than competition. • An empirical application offers a quantitative assessment of cooperation. • Cooperation among infrastructure providers benefits passengers and operators. • Welfare gains are sizeable noting how cooperation may encourage high-speed rail. [ABSTRACT FROM AUTHOR]