Hotelling in the air? Flight departures in Norway

The purpose of this study is to test empirically the degree of departure-time differentiation in the Norwegian airline industry, where we observed both monopoly and duopoly routes following deregulation in 1994. By constructing a waiting cost index where we measure degree of clustering of departure times during a day on 12 different routes before and after deregulation, we can use an econometric panel data test to see whether there have been systematic changes in localisation of departures. We find that after deregulation the clustering of flights increases on duopoly routes as compared to monopoly routes. When we focus on the more narrowly defined business segment we find an even clearer pattern of flight clustering after deregulation.