European Airline Mergers, Alliance Consolidation, and Consumer Welfare

Jan Brueckner and Eric Pels

No 1154, CESifo Working Paper Series from CESifo

Abstract: This paper explores the effects of a European airline merger followed by a consolidation of two competing international alliances. The exercise has been inspired by the Air France-KLM merger, which is expected to spur consolidation of the Northwest-KLM and SkyTeam alliances into a single mega-alliance. The results of the analysis show that, although the airlines benefit through higher profits, the merger and alliance consolidation harm consumers while reducing overall social surplus. The reason for this negative outcome is that, as modeled, all the effects of the merger and alliance consolidation are anticompetitive.

Keywords: european airline merger; airlines; airline alliance; transportation (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-acc, nep-com and nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: European airline mergers, alliance consolidation, and consumer welfare (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1154

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