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Airline Networks, Mergers, and Consumer Welfare

Kai Hüschelrath and Kathrin Müller
Authors registered in the RePEc Author Service: Kai Hueschelrath

Journal of Transport Economics and Policy, 2014, vol. 48, issue 3, 385-407

Abstract: We study the consumer welfare effects of mergers in airline networks. Based on the development of a general classification of affected routes, we apply a difference-in-differences approach to exemplarily investigate the price effects of the America West Airlines-US Airways merger completed in 2005. We find that although average prices increased substantially on routes in which both airlines competed either on a non-stop or one-stop basis prior to the merger, substantial average price reductions observed for routes without any pre-merger overlap suggest that the merger led to a net increase in consumer welfare. © 2013 LSE and the University of Bath

Date: 2014
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