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Assessing the price effects of airline alliances on parallel routes

Author

Listed:
  • Wan, Xiang
  • Zou, Li
  • Dresner, Martin

Abstract

The impact of airline alliances on airfares on nonstop hub-to-hub routes is investigated. Analytical results suggest that the net effect on airfares is uncertain. Empirical evidence shows that the impact of two of three alliances (Star and SkyTeam) on prices on transatlantic hub-to-hub routes is insignificant after controlling for other factors. Routes between oneworld alliance hubs, however, have significantly lower business class airfares compared to other routes. These results indicate that the impact of alliances on transatlantic hub-to-hub airfares varies depending on the alliance; possibly due to the ability of an alliance to coordinate fares.

Suggested Citation

  • Wan, Xiang & Zou, Li & Dresner, Martin, 2009. "Assessing the price effects of airline alliances on parallel routes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(4), pages 627-641, July.
  • Handle: RePEc:eee:transe:v:45:y:2009:i:4:p:627-641
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    Citations

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    Cited by:

    1. Min, Hokey & Joo, Seong-Jong, 2016. "A comparative performance analysis of airline strategic alliances using data envelopment analysis," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 99-110.
    2. Ismail, Noor Azina & Jenatabadi, Hashem Salarzadeh, 2014. "The influence of firm age on the relationships of airline performance, economic situation and internal operation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 212-224.
    3. Adler, Nicole & Hanany, Eran, 2016. "Regulating inter-firm agreements: The case of airline codesharing in parallel networks," Transportation Research Part B: Methodological, Elsevier, vol. 84(C), pages 31-54.
    4. repec:eee:transa:v:103:y:2017:i:c:p:432-443 is not listed on IDEAS
    5. Adler, Nicole & Mantin, Benny, 2015. "Government and company contracts: The effect on service and prices in international airline markets," Economics of Transportation, Elsevier, vol. 4(3), pages 166-177.
    6. repec:eee:transa:v:106:y:2017:i:c:p:197-214 is not listed on IDEAS
    7. Zou, Li & Chen, Xueqian, 2017. "The effect of code-sharing alliances on airline profitability," Journal of Air Transport Management, Elsevier, vol. 58(C), pages 50-57.

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