Technological innovation in the airline industry: The impact of regional jets
AbstractThis paper explores the impact of the regional jet (RJ), an important new technological innovation in the airline industry, on service patterns and service quality. The paper's theoretical analysis predicts that the frequency advantage of RJs over jets, a consequence of their small size, should have led to the emergence of point-to-point (PP) service in thin markets where such service was previously uneconomical. However, the evidence contradicts this prediction, showing that markets attracting new PP service by RJs had demographic characteristics similar to those of markets that already had jet PP service or attracted it after 1996. Additional descriptive evidence shows that RJs were used to provide service on a large number of new hub-and-spoke (HS) routes, and that they replaced discontinued jet and turboprop service on many such routes, as well as supplementing continuing jet service. When replacement or supplementation by RJs occurred, passengers benefited from better service quality via higher flight frequencies.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Industrial Organization.
Volume (Year): 27 (2009)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/inca/505551
Regional jets Airlines;
Other versions of this item:
- Jan K. Brueckner & Vivek Pai, 2007. "Technological Innovation in the Airline Industry: The Impact of Regional Jets," Working Papers 060720, University of California-Irvine, Department of Economics.
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
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