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Entry Behaviour and Financial Distress: An Empirical Analysis of the US Domestic Airline Industry


  • Chia-Mei Liu


This paper tests the empirical link between a firm's financial conditions and its probability of entering new markets in the US airline industry. The analysis is conducted using airline data from the top 500 airport-pairs during the period between 1993 and 2003. The result shows that a legacy carrier is less likely to enter new airport-pairs when its leverage increases. On the other hand, there is little evidence of such link for a low-cost carrier. © 2009 LSE and the University of Bath

Suggested Citation

  • Chia-Mei Liu, 2009. "Entry Behaviour and Financial Distress: An Empirical Analysis of the US Domestic Airline Industry," Journal of Transport Economics and Policy, University of Bath, vol. 43(2), pages 237-256, May.
  • Handle: RePEc:tpe:jtecpo:v:43:y:2009:i:2:p:237-256

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    Cited by:

    1. Moon, Joonho & Lee, Won Seok & Dattilo, John, 2015. "Determinants of the payout decision in the airline industry," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 282-288.
    2. Hashem Salarzadeh Jenatabadi & Peyman Babashamsi & Datis Khajeheian & Nader Seyyed Amiri, 2016. "Airline Sustainability Modeling: A New Framework with Application of Bayesian Structural Equation Modeling," Sustainability, MDPI, Open Access Journal, vol. 8(11), pages 1-17, November.
    3. Homsombat, Winai & Lei, Zheng & Fu, Xiaowen, 2014. "Competitive effects of the airlines-within-airlines strategy – Pricing and route entry patterns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 63(C), pages 1-16.

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