Concentration Analysis in the Turkish Domestic Air Transportation Industry using with CRm and Herfindahl-Hirschman Indexes

Concentration means that economic activities are dominated or owned by a small number of firms in any market. Accordingly, there is a negative relationship between concentration ratio in the market and level of competition. In other words, as the concentration rate increases, level of competition decreases and vice-versa. The low market concentration ratio and imperfect competition are common occurences in the emerging countries such as Turkey. In this study, concentration ratio and level of competition of the top five airports in Turkey will be examined by years. In this context, the airlines’ (using these top five airports) number of passengers and cargo volumes between 2012 and 2015 will be used to analyse. This study is significant as it is the first study to investigate airport market concentration and market structure in Turkey. In this context, the relationship between domestic air transportation concentration ratio and market structure will be demonstrated with using M-Firm Concentration Ratio (CRm) and Herfindahl-Hirschman Index (HHI) analysis methods. After the analyses, our results justified that market structure is far from competition. In addition, there are recommendations and determinations to what to do for ensuring competition and maintaining it truly in this study