The air transportation vertical channel, the global value added, and the role played by private versus public control

The air transport sector is characterized by a vertical channel with several stages, from aircraft manufacturers to airlines, which are the last stage of the supply chain. An analysis of the supply in each of these stages allows us to identify the players that obtain the largest share of the global surplus generated by the sector, as well as those in possible conflict generated by different forms of capital control. The analysis identifies three critical issues. First, although the airlines are the main players, they only obtain small share of the global value added in favor of airports and leasing companies. Second, the degree of competition in the different stages is not uniform, with intense competition in the airline and handler sectors, and much less intense in the other stages. Last, capital control also differs in the various stages, which might may give rise to conflicts of interest, particularly when there is a capital concentration in the public sector. These conflicts can be serious if adopted in more open markets, precisely because they generate undue competitive advantage. In such cases, policies should be adopted that can reduce the impact of these conflicts.