The effect of vertical product differentiation on fare and market share: Evidence from Delta Air Lines’ middle seat policy

Max J. Hyman and Ian Savage

Economics of Transportation, 2022, vol. 31, issue C

Abstract: Delta Air Lines engaged in vertical product differentiation during the COVID-19 pandemic. To ensure that passengers did not sit next to a stranger, Delta did not sell the middle seat on its flights that had them. Its principal rivals, American Airlines and United Airlines, sold all seats. Analysis of the non-stop routes on which Delta faced head-to-head competition with American or United reveals that Delta was able to charge a 10% fare premium and increase its relative market share by 4.7 percentage points from its middle seat policy.

Keywords: Vertical product differentiation; Aviation; Pandemic (search for similar items in EconPapers)
JEL-codes: L93 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecotra:v:31:y:2022:i:c:s2212012222000259

DOI: 10.1016/j.ecotra.2022.100274

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