Ex-post evaluation of the American Airlines-US Airways merger: a structural approach

Christian Bontemps, Kevin Remmy and Jiangyu Wei
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Kevin Remmy: University of Mannheim = Universität Mannheim
Jiangyu Wei: Compass Lexecon

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Abstract: In this paper, we estimate a structural model of the domestic US airline market to analyse the effect of the recent merger between American Airlines and US Airways. Our results show that, between 2011 and 2016, a substantial fuel price drop, in conjunction with changes in consumer preferences towards direct flights, completely rationalises the observed decrease in prices. However, we estimate that, during the same period, more than half of the consumer welfare increase is due, on top of these environmental changes, to the ex-post optimisation of the networks of the newly merged airline and of its competitors.

Keywords: Merger; Airlines; Network; Structural model; Nested logit; Airfare; Demand; Supply (search for similar items in EconPapers)
Date: 2022-04
New Economics Papers: this item is included in nep-com, nep-reg and nep-tre
Note: View the original document on HAL open archive server: https://hal.science/hal-03800655v1
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Citations: View citations in EconPapers (2)

Published in Journal of Transport Economics and Policy, 2022, 56 (2), pp.129-155

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Working Paper: Ex-post Evaluation of the American Airlines–US Airways Merger: a structural approach (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03800655

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