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Resource availability and new entry in the US airline industry

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  • Dresner, Martin
  • Windle, Robert

Abstract

This paper examines the impact of resource availability, namely labor and flight equipment availability, on entry into the US airline industry. The general thesis is that when labor and/or flight equipment is in scarce supply, the cost of starting and operating a new airline, or the cost of expanding onto new routes, is high. The paper found a positive correlation between new aircraft delivery and new entry onto routes by majors but a negative correlation between new aircraft delivery and entry onto routes by non-majors. The paper also found a negative correlation between major carrier salary levels and entry by majors but a positive correlation between major carrier salary levels and entry by non-majors.

Suggested Citation

  • Dresner, Martin & Windle, Robert, 2001. "Resource availability and new entry in the US airline industry," Journal of Air Transport Management, Elsevier, vol. 7(4), pages 231-239.
    • Handle: RePEc:eee:jaitra:v:7:y:2001:i:4:p:231-239
    DOI: 10.1016/S0969-6997(01)00011-4
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    References listed on IDEAS

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    1. Hurdle, Gloria J, et al, 1989. "Concentration, Potential Entry, and Performance in the Airline Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 38(2), pages 119-139, December.
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    Cited by:

    1. Tsai, Dungchun & Chang, Shaochi & Chen, WeiWei & Tran, Chau-lan, 2008. "The market valuation of new route announcements," Journal of Air Transport Management, Elsevier, vol. 14(5), pages 252-256.

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