Airline networks, mergers, and consumer welfare

Kai Hüschelrath and Kathrin Müller

No 13-028, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We study the consumer welfare effects of mergers in airline networks. Based on the development of a general classification of affected routes, we apply a difference-indifferences approach to exemplarily investigate the price effects of the America West Airlines - US Airways merger completed in 2005. We find that although average prices increased substantially on routes in which both airlines competed either on a non-stop or one-stop basis prior to the merger, substantial average price reductions observed for routes without any premerger overlap suggest that the merger led to a net increase in consumer welfare.

Keywords: Airline industry; merger; market power; consumer welfare; price effects (search for similar items in EconPapers)
JEL-codes: L40 L93 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-com, nep-net, nep-reg, nep-tre and nep-ure
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Related works:
Journal Article: Airline Networks, Mergers, and Consumer Welfare (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13028

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