The Brattle Group advises transport companies and operators, international governments, and regulatory agencies on restructuring, regulatory reform, public policy, and strategy.
We provide economic analysis and expert testimony in major litigation matters in the aerospace, aviation, auto, railroad, postal, and shipping industries.
Our staff includes professionals with backgrounds in economics, applied econometrics, financial analysis, public policy assessment, and market research. They have published widely on subjects ranging from demand forecasting techniques to finance and marketing, and has presented papers at international transportation conferences in the U.S., Europe, and Australia.
The Brattle Group has experience in transport demand modeling and forecasting and have advised in all aspects related to theory, data analysis, estimation, and application. Our economic experts understand the dynamic fundamentals that drive travel patterns for nearly every transport mode over various geographic scales.
Effective pricing strategy is critical to the bottom line, especially in the transportation industry, where prices can vary by distance traveled, corridor time of day, day of the week, commodity, level of service, speed, reliability, and a host of other factors. We provide an array of sophisticated tools for analyzing the complex transportation marketplace and for crafting pricing strategies that support short- and long-term business objectives. We offer clients in-depth economic consulting skills and extensive hands-on experience in cost analysis, demand modeling, price elasticity measurement, market assessment, competitive analysis, and incentive price schedule design.
Through experience in dealing with problems of public policy, regulation and deregulation, market design, and market failure, we understand the strengths and weaknesses of public and private service provisions. Our economic consultants assist government and quasi-government entities through the transition to private ownership and operation. We design intermediate organizational forms combining public ownership and/or oversight with the efficiency and customer responsiveness of the private sector. We also devise regulatory structures that provide oversight of newly privatized entities operating in new markets.
We assist in the development, review, and assessment of revenue forecasts and the evaluation of competitive and regulatory risks. Members of The Brattle Group help clients design regulatory, governance, and oversight structures and determine the appropriate apportionment of project risk. We also develop effective financing strategies.
The Brattle Group specializes in economic analysis of controversial and complex public policy issues. We develop white papers, reports, and expert testimony that inform and influence the policy debate by making the underlying economic issues clear and compelling to non-economists. These studies typically combine the use of sophisticated quantitative methods with qualitative analysis of institutions and the policy environment. We disseminate the results of our policy analysis through publications and appearances in public policy forums.
The Brattle Group's internationally recognized economic experts advise governments and regulators on the structure and economics of reforms in transportation industries including airports, national airlines, railroads, and pipelines. We provide market development forecasts, planning tools, and policy frameworks to assist in the complex task of restructuring these markets. In addition, we offer expert economic and regulatory consulting to companies operating under existing regulatory regimes.
Below is a list of representative engagements for our Transportation practice.
The Brattle Group provided expert testimony on behalf of a global provider of courier services in an investor dispute filed under an international free trade agreement. This dispute alleged that the respondent national government had granted the national postal operator monopoly control over basic postal services and other special privileges. Our work involved a thorough review of the postal operator’s pricing and cost allocation procedures and our testimony defined equal treatment in the context of courier services.
For a foreign-policy think tank, we analyzed the impact on the U.S. economy of a decision to lift the longstanding U.S. travel ban to Cuba. This study estimated the number of additional Americans who would travel to Cuba in the absence of travel restrictions and calculated the net increase in demand for travel on U.S. airlines.
For a group of automobile dealers, a member of The Brattle Group conducted an econometric analysis to quantify the extent to which these dealers had suffered economic injury as a result of a scheme in which executives of the auto manufacturer accepted bribes from a subset of dealers in exchange for providing them with extra allotments of highly profitable car models. The settlement of this litigation awarded a payment of several hundred million dollars to the non-bribe paying dealers.
For a group of automobile dealers engaged in a dispute with a distributor, a member of The Brattle Group offered expert testimony analyzing the new auto allocation procedures used by the distributor, the distributor’s policies regarding accessorization of new vehicles, and their economic effects on individual dealers. This work involved econometric modeling of the dynamics of dealer inventories and the determinants of time-to-sale for individual vehicles.
For the joint defense in a high-profile price fixing case, a member of The Brattle Group directed a major analysis of posted air fares looking for patterns that could be construed as signaling. We analyzed changes in fares for dozens of fare classes by all major airlines in the U.S. and Canada over a two-and-a-half-year period.
For a consortium of major U.S., European and Japanese auto manufacturers and related firms under the auspices of the World Business Council, members of The Brattle Group played a key role in a major investigation of long-term trends in mobility. This study was worldwide in scope, addressing urban, rural, and intercity passenger and freight transportation in both developed and developing countries. The study focused on the sustainability of the current transportation system and the extent to which exhaustion of fossil fuels, environmental constraints, infrastructure shortages, or institutional barriers were likely to constrain mobility over the next several decades. Results of this work had a significant impact on the long-term business and product development strategies of the study’s sponsors.
The European Commission selected The Brattle Group to undertake a major study of the effects of eliminating all commercial restrictions on competition and investment between civil air carriers in the U.S. and Europe. Our study, The Economic Impact of an EU-US Open Aviation Area, has been widely cited in the press, and both the European Commission and the U.S. government drew upon it when negotiating the 2005 EU-US aviation agreement.
Our report highlighted the quantitative methods utilized to estimate the impact of market liberalization on airline costs, air fares and passenger traffic for transatlantic routes and routes within Europe. The study helped to determine the effects of liberalization on consumer welfare and employment.
For a large international airline, The Brattle Group provided expert analysis opposing a request by SkyTeam alliance members for expanded antitrust immunity. We replicated and updated previous studies by the U.S. Department of Transportation (DOT) to show that, since 1999, air fares had increased sharply in transatlantic markets dominated by immunized alliances relative to other transatlantic markets, a turnaround of earlier fare trends. Our analysis found that this turnaround was due in part to the exercise of market power by the immunized alliances.
For a major U.S.-based freight railroad, we developed a system of models to predict traffic levels and revenues by carrier for the North American freight rail market under alternative scenarios regarding market structure and regulatory policy. This modeling system incorporated detailed representations of the North American rail and highway networks, algorithms for determining shipment routing under alternative operating policies, and a series of statistical models capturing the underlying structure of freight traffic flows.
For the public authority responsible for the operation of one of the largest international gateway airports in the country, members of The Brattle Group conducted a comprehensive review of sources of information on air cargo movements. Using the results of this review we worked with authority staff to devise a strategy for monitoring trends in shipments by ultimate origin and destination, commodity, carrier, and type of service, and for factoring this information into a process for planning and executing air cargo facility improvements.
On behalf of the Federal Trade Commission, we assessed the effectiveness of liner shipping cartels in exercising market power. This work involved econometric analysis of the determinants of freight rates, including the impact of changes in cartel membership on rates. We also analyzed the impact of filing requirements, service contracts, capacity reduction agreements, and inland freight rate agreements.
We have offered testimony before the Surface Transportation Board (previously the Interstate Commerce Commission) on a variety of issues including competitive impacts of proposed mergers, comments on appropriate regulatory framework including proper implementation of the stand-alone cost test, cost of capital calculations, and trackage rights. These engagements required thorough knowledge of the North American rail market paired with competitive analysis, cost estimation, and demand modeling.
On behalf of the Directorate General for Competition of the European Commission, we analyzed the competitive implications of a proposal by ocean carriers serving U.S.-Europe to extend their conference agreement to include intermodal freight transport and coordinated capacity restrictions. We submitted our findings to the European Court of First Instance.
For a business jet aircraft manufacturer accused of attempted monopolization, a member of The Brattle Group analyzed the structure of the market and evaluated whether the availability of similar aircraft from other manufacturers constrained the defendant’s ability to exercise market power.
For an international gateway airport, a member of The Brattle Group evaluated the impact of alternative ways to reduce flight delays, including a minimum aircraft-size requirement, expansion of the airport’s capacity, and a variety of pricing and slot allocation mechanisms.