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Beyond Lotka–Volterra: A game-theoretic exploration of two-dimensional airline competition

Khan, Nokhaiz Tariq, Al Hanbali, Ahmad, Demir, Emrah ORCID: https://orcid.org/0000-0002-4726-2556 and KIM, Yunbae 2025. Beyond Lotka–Volterra: A game-theoretic exploration of two-dimensional airline competition. Transportation Research Part A: Policy and Practice
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Abstract

Korea's airline industry has undergone a transformative period marked by strategic acquisition of Asiana Airlines (AAL) by Korean Air (KAL). This acquisition is an important moment for the Korean airline industry, as KAL strengthens its position while facing competition from low-cost carriers (LCCs). The competition between full-service carriers (FSCs) and LCCs in Korea has shifted due to the pandemic, regulations, and market changes. This study presents a two-stage Lotka-Volterra model integrated with game theory to analyze the competitive dynamics between FSCs and LCCs in Korea. Specifically, this study examines airline competition before and after COVID-19 to reflect evolving market dynamics, where each carrier’s market share is influenced by the other’s strategies. Incorporating game theory, we evaluate carrier interactions and analyze the effects of competition and cooperation strategies on market equilibrium. Our model uncovers shifts in competitive behavior and market dynamics, highlighting the pandemic’s influence on airline competition. Although LCCs and FSCs adopted different strategies, the industry’s unstable recovery highlights ongoing restructuring and sustainability challenges. Based on our findings, we also provide managerial insights into airline competition and strategic approaches for navigating external shocks.

Item Type: Article
Status: In Press
Schools: Schools > Business (Including Economics)
Publisher: Elsevier
ISSN: 0965-8564
Date of First Compliant Deposit: 28 July 2025
Date of Acceptance: 23 July 2025
Last Modified: 29 Jul 2025 11:45
URI: https://orca.cardiff.ac.uk/id/eprint/180065

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