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Product Quality Effects of International Airline Alliances, Antitrust Immunity, and Domestic Mergers

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  • Gayle Philip G.

    (Department of Economics, Kansas State University, 322 Waters Hall, Manhattan, KS 66506)

  • Thomas Tyson

    (Department of Economics, Kansas State University, 327 Waters Hall, Manhattan, KS 66506)

Abstract

Much of the literature on airline cooperation focuses on the price effects of cooperation. A key contribution of our paper is to empirically examine the product quality effects of airline cooperation. Two common types of cooperation among airlines involve international alliances and antitrust immunity (ATI), where ATI allows for more extensive cooperation. Additionally, this paper examines the extent to which domestic mergers affect the quality of international air travel products. The results suggest that increases in the membership of a carrier’s alliance or ATI partners and domestic mergers are associated with the carrier’s own products having more travel-convenient routing quality. Therefore, a complete welfare evaluation of airline cooperation and mergers should not ignore product quality effects.

Suggested Citation

  • Gayle Philip G. & Thomas Tyson, 2015. "Product Quality Effects of International Airline Alliances, Antitrust Immunity, and Domestic Mergers," Review of Network Economics, De Gruyter, vol. 14(1), pages 45-74, March.
    • Handle: RePEc:bpj:rneart:v:14:y:2015:i:1:p:45-74:n:2
    DOI: 10.1515/rne-2015-0026
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    References listed on IDEAS

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    Cited by:

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    3. Jules Yimga, 2023. "Multimarket Contact and Market Power Implications in the US Airline Industry," Networks and Spatial Economics, Springer, vol. 23(4), pages 985-1024, December.
    4. Le, Huubinh B. & Yimga, Jules O., 2023. "Codeshare restrictions as antitrust remedy," Transport Policy, Elsevier, vol. 138(C), pages 17-24.
    5. Yimga, Jules O., 2017. "Airline code-sharing and its effects on on-time performance," Journal of Air Transport Management, Elsevier, vol. 58(C), pages 76-90.
    6. Yimga, Jules, 2022. "Code-sharing agreements and path quality in the US airline industry," Transport Policy, Elsevier, vol. 116(C), pages 369-385.
    7. Yimga, Jules & Gorjidooz, Javad, 2019. "Airline schedule padding and consumer choice behavior," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 71-79.
    8. Yimga, Jules, 2018. "Domestic code-sharing agreements and on-time performance: Evidence from the US airline industry," Transport Policy, Elsevier, vol. 71(C), pages 14-27.
    9. Brueckner, Jan K. & Flores-Fillol, Ricardo, 2020. "Market structure and quality determination for complementary products: Alliances and service quality in the airline industry," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    10. Menezes Bezerra Sampaio, Raquel & Urdanoz, Miguel, 2022. "Airlines' cooperation in the US domestic market: Measuring the evolution of price gaps," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 424-443.

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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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