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Domestic Code Sharing, Alliances, and Airfares in the U.S. Airline Industry

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Author Info

  • Harumi Ito
  • Darin Lee

Abstract

This paper examines the impact of domestic code-sharing alliances on airfares. Our analysis yields two novel and somewhat surprising findings that have yet to be documented in the literature. First, unlike with international code sharing, we find that the overwhelming majority of domestic code-share itineraries involve a single operating carrier, a phenomenon that we refer to as virtual code sharing. Second, we find that these virtual code-sharing itineraries are priced lower than itineraries operated and marketed by a single carrier in the same market. We suggest that carriers may be using virtual code sharing—in large part—as a generic product to compete for the most price-sensitive passengers.

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File URL: http://www.journals.uchicago.edu/cgi-bin/resolve?id=doi:10.1086/511318
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Bibliographic Info

Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 50 (2007)
Issue (Month): ()
Pages: 355-380

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Handle: RePEc:ucp:jlawec:v:50:y:2007:p:355-380

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Web page: http://www.journals.uchicago.edu/JLE/

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Cited by:
  1. Chun, So Yeon & Kleywegt, Anton J & Shapiro, Alexander, 2011. "Revenue management in resource exchange seller alliances," MPRA Paper 34657, University Library of Munich, Germany.

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