Assessing the price effects of airline alliances on parallel routes

Xiang Wan, Li Zou and Martin Dresner

Transportation Research Part E: Logistics and Transportation Review, 2009, vol. 45, issue 4, 627-641

Abstract: The impact of airline alliances on airfares on nonstop hub-to-hub routes is investigated. Analytical results suggest that the net effect on airfares is uncertain. Empirical evidence shows that the impact of two of three alliances (Star and SkyTeam) on prices on transatlantic hub-to-hub routes is insignificant after controlling for other factors. Routes between oneworld alliance hubs, however, have significantly lower business class airfares compared to other routes. These results indicate that the impact of alliances on transatlantic hub-to-hub airfares varies depending on the alliance; possibly due to the ability of an alliance to coordinate fares.

Keywords: Alliances; Airlines; Competitive; strategy; Pricing (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (25)

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