This paper considers the effect of an airline's scale of operation at an airport
on the profitability of routes flown out of that airport. The empirical methodology
uses the entry decisions of airlines as indicators of underlying profitability; the
results extend the empirical literature on airport presence by providing a new set
of estimates of the determinants of city-pair profitability. These estimates imply
that city-pair profits increase in airport presence and decrease rapidly in the number
of entering firms. The literature on empirical models of oligopoly entry is also
extended via a focus on the role of differences between firms.