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

Christian Bontemps, Kevin Remmy and Jiangyu Wei

No 21-1258, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: In this paper, we estimate a structural model of the domestic US airline market to analyze 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 toward direct flights completely rationalizes 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 optimization 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: 2021-11-09
New Economics Papers: this item is included in nep-com, nep-reg and nep-tre
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... 2021/wp_tse_1258.pdf Full Text (application/pdf)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... mentary_material.pdf Supplementary material (application/pdf)

Related works:
Working Paper: Ex-post evaluation of the American Airlines-US Airways merger: a structural approach (2022)
Working Paper: Ex-post Evaluation of the American Airlines–US Airways Merger: a structural approach (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:126153

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().