Codeshare restrictions as antitrust remedy

Huubinh B. Le and Jules O. Yimga

Transport Policy, 2023, vol. 138, issue C, 17-24

Abstract: To incentivize competitive conduct, the US Department of Justice restricted codesharing between Alaska Airlines and American Airlines in several route scenarios as a condition for allowing the former to acquire Virgin Airlines. Have these restrictions incentivized competitive conduct? This paper investigates their effects on output, price, and revenue in these route scenarios. Estimation results suggest that output and price have significantly decreased, particularly for routes between the airlines' hubs or focus cities, indicating that the restrictions have not incentivized competitive conduct. Rather, the decrease in both output and price suggests that consumers’ demand has decreased. Welfare for consumers and airlines has decreased.

Keywords: Antitrust policy; Air transportation; Airline codesharing; Route competition (search for similar items in EconPapers)
JEL-codes: L11 L40 L93 R48 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1016/j.tranpol.2023.05.004

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