Actual, Adjacent, and Potential Competition Estimating the Full Effect of Southwest Airlines
AbstractSouthwest Airlines is frequently credited with having an important influence on the success of airline deregulation in the United States. This paper uses an original set of competition variables to estimate the extent of that influence in 1998. The estimated savings - due to actual, adjacent, and potential competition from Southwest - were $12.9 billion. Southwest's low fares were directly responsible for $3.4 billion of these savings to passengers. The remaining $9.5 billion represents the effect that actual, adjacent, and potential competition from Southwest had on other carriers' fares. These savings amount to 20 per cent of the airline industry's 1998 domestic scheduled passenger revenue and slightly more than half the fare reductions attributed to airline deregulation. From a policy perspective, these results are both troubling and encouraging. On the one hand, it is troubling to find that a large part of the fare reductions from airline deregulation is due to one carrier. On the other hand, if entry by a carrier with the appropriate characteristics can make such a difference, policies that encourage entry - for example, relaxing the restriction on entry by foreign-owned carriers - may have a large impact on passenger welfare. ? The London School of Economics and the University of Bath 2001
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy.
Volume (Year): 35 (2001)
Issue (Month): 2 (May)
Contact details of provider:
Web page: http://www.bath.ac.uk/e-journals/jtep
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.