Airline mergers with low cost carriers
Tomohiko Kawamori and
Ming Hsin Lin
Economics of Transportation, 2013, vol. 2, issue 2, 63-71
A hub carrier operates one hub linking multiple non-hub cities. It merges with a low cost carrier whose nonstop service competes with its one-stop service. The merged airline's profit is maximized by withdrawing the competing one-stop (nonstop) service when the hub carrier's operating cost and connecting passengers' hub-through additional time costs are large (small). The realized merger is welfare-improving (welfare-decreasing) when these costs are large or small (intermediate). These findings suggest the necessity of merger regulation. In some regions, the necessity of regulation does not monotonically change as network size increases.
Keywords: Airline mergers; Hub-spoke network carriers; Low cost carriers; Antitrust immunity; Schedule competition (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecotra:v:2:y:2013:i:2:p:63-71
Access Statistics for this article
Economics of Transportation is currently edited by Mogens Fosgerau and Erik Verhoef
More articles in Economics of Transportation from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().