LAUSR

Abstract Market concentration in the airline industry, its measurement, causes, and consequences, has been a long-standing issue with airline representatives, public authorities, interest groups, and academics alike. This paper extends research on assessing market concentration in the airline industry by incorporating high-speed rail (HSR) services and connecting flights as travel alternatives to nonstop flights. Our methodology includes a connection builder calibrated with booking data, a Quality of Service Index (QSI) model for quality-weighting of travel alternatives, and the Herfindahl-Hirschman Index (HHI). We calculate HHI for origin and destination (O&D) city pairs originating in Germany on route and city level and provide aggregate metrics for all directional O&Ds worldwide ex Germany and across different destination categories applying a gravity model for size-weighting of O&Ds. Our findings support concerns about Lufthansa Group becoming more dominant in the German air transport market after the collapse of Air Berlin.