Product specification under a threat of entry: Evidence from Airlines’ departure times

Germán Bet

International Journal of Industrial Organization, 2021, vol. 75, issue C

Abstract: I examine how incumbent airlines adjust their departure times in response to the threat of entry by Southwest Airlines. I find that incumbents space their flights more evenly throughout the day when faced with potential entry. This reaction depends strongly on the level of the incumbent’s market share and hub status at the endpoint airports of a market. The evidence suggests that incumbents’ actions are designed to deter, rather than accommodate, entry. I do not find effects on flight frequency, suggesting that incumbents may rely more on the strategic choice of product attributes than on product proliferation to deter entry.

Keywords: Airlines; Scheduling; Location choice; Threat of entry (search for similar items in EconPapers)
JEL-codes: D43 L13 L93 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:75:y:2021:i:c:s0167718720301284

DOI: 10.1016/j.ijindorg.2020.102705

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