Air–rail intermodal agreements: Balancing the competition and environmental effects

The use of air–rail intermodal agreements has expanded over recent decades. Significant benefits have been associated with such agreements for airlines, rail operators, intermodal airports and consumers. In addition, a number of environmental benefits are perceived to be associated with a modal shift from air to rail. However, these agreements could, in some circumstances, raise competition concerns and, unlike cooperation agreements between airlines, there has been a limited focus by competition authorities to date on examining their competitive effects. Uncertainty as to regulatory treatment maybe limiting the spread and scope of air–rail intermodal agreements. This paper considers the factors relevant to any competition assessment of these agreements and raises the question of whether environmental benefits should be considered as part of the assessment.

► Air–rail intermodal agreements raise competition and environmental issues.
► To analyze them, we draw parallels with code-share agreements and other industries.
► Behind and beyond intermodal agreements do not raise major competitive concerns.
► However parallel intermodal agreements may raise competition issues.
► If environmental benefits are taken into account, then they should be allowed.