Airline competition and domestic US airfares: A comprehensivereappraisal

Jan Brueckner, Darin Lee and Ethan S. Singer

Economics of Transportation, 2013, vol. 2, issue 1, 1-17

Abstract: This paper extends recent research on the fare impacts of low-cost carriers, incorporating its adjacent-airport approach to offer a comprehensive picture of the competitive effects of both legacy carriers and low-cost carriers. The analysis measures the impact of in-market (i.e., airport-pair) competition and adjacent competition for both types of carriers, while also capturing the impact of potential competition from low-cost carriers. Moreover, this comprehensive approach is applied separately to two different types of markets, nonstop and connecting, which have not been simultaneously treated before within a single study. The results show that most forms of legacy-carrier competition have weak effects on average fares. Low-cost carrier competition, on the other hand, has dramatic fare impacts, whether it occurs on the airport-pair, at adjacent airports, or as potential competition.

Keywords: Airlines; Airfares; Competition; Merger (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (90)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecotra:v:2:y:2013:i:1:p:1-17

DOI: 10.1016/j.ecotra.2012.06.001

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