Merger Mania and Airline Fares

Richard Butler and John Huston
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Richard Butler: Trinity University, San Antonio
John Huston: Trinity University, San Antonio

Eastern Economic Journal, 1989, vol. 15, issue 1, 7-16

Abstract: The purpose of this paper is to distinguish the separate effects of actual and potential competition on fares using a more realistic and detailed representation of the latter than in previous studies. An investigation of routes involving the St. Louis hub demonstrates that routes with a hub at one end are less contestable than the (more competitive) through routes. These results imply that mergers of carriers sharing a hub will increase the fares paid by discretionary travelers to the hub, but that through fares (and unrestricted fares) are less affected.

Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:eej:eeconj:v:15:y:1989:i:1:p:7-16

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