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Patterns and effects of entry in US airline markets

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  • Hüschelrath, Kai
  • Müller, Kathrin

Abstract

We use T-100 traffic data and DB1B fare data from the U.S. Department of Transportation to identify patterns and effects of entry by network carriers and low-cost carriers in non-stop U.S. airline markets. For the sample period from 1996 to 2009, we find that entry activity of low-cost carriers did not only experience significant absolute increases but also led to substantial fare reductions. As route entries by network carriers do not have comparable effects, the existence and expansion of low-cost carriers must be considered as the main driver of competition in the domestic U.S. airline industry.

Suggested Citation

  • Hüschelrath, Kai & Müller, Kathrin, 2011. "Patterns and effects of entry in US airline markets," ZEW Discussion Papers 11-059, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:11059
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    Cited by:

    1. Kai Hüschelrath & Kathrin Müller, 2014. "Airline Networks, Mergers, and Consumer Welfare," Journal of Transport Economics and Policy, University of Bath, vol. 48(3), pages 385-407, September.
    2. B. F. Oliveira & A. V. M Oliveira, 2023. "An empirical analysis of the determinants of network construction for Azul Airlines," Papers 2312.05630, arXiv.org.

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    More about this item

    Keywords

    Airline industry; liberalisation; entry; low-cost carriers;
    All these keywords.

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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