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The Price Effects of the Delta/Northwest Airline Merger

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  • Dan Luo

Abstract

This paper examines the price effects of the merger between Delta Airlines and Northwest Airlines. Empirical analysis finds that, other things equal, the fares for airport-pairs where Delta and Northwest competed with each other prior to the merger did not increase by much following the merger. This result is consistent with the additional finding that the impact of changes in low-cost carrier competition is large while the effect of changes in competition from legacy carriers is slight. Since both Delta and Northwest Airlines are legacy carriers, the results for other legacies suggest that the merger should not have exerted a dramatic impact on fares. Copyright Springer Science+Business Media New York 2014

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  • Dan Luo, 2014. "The Price Effects of the Delta/Northwest Airline Merger," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(1), pages 27-48, February.
    • Handle: RePEc:kap:revind:v:44:y:2014:i:1:p:27-48
    DOI: 10.1007/s11151-013-9380-1
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    References listed on IDEAS

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