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Airline competition and domestic US airfares: A comprehensivereappraisal

Author

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  • Brueckner, Jan K.
  • Lee, Darin
  • Singer, Ethan S.

Abstract

This paper extends recent research on the fare impacts of low-cost carriers, incorporating its adjacent-airport approach to offer a comprehensive picture of the competitive effects of both legacy carriers and low-cost carriers. The analysis measures the impact of in-market (i.e., airport-pair) competition and adjacent competition for both types of carriers, while also capturing the impact of potential competition from low-cost carriers. Moreover, this comprehensive approach is applied separately to two different types of markets, nonstop and connecting, which have not been simultaneously treated before within a single study. The results show that most forms of legacy-carrier competition have weak effects on average fares. Low-cost carrier competition, on the other hand, has dramatic fare impacts, whether it occurs on the airport-pair, at adjacent airports, or as potential competition.

Suggested Citation

  • Brueckner, Jan K. & Lee, Darin & Singer, Ethan S., 2013. "Airline competition and domestic US airfares: A comprehensivereappraisal," Economics of Transportation, Elsevier, vol. 2(1), pages 1-17.
  • Handle: RePEc:eee:ecotra:v:2:y:2013:i:1:p:1-17
    DOI: 10.1016/j.ecotra.2012.06.001
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    References listed on IDEAS

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    Keywords

    Airlines; Airfares; Competition; Merger;

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