International Airfares in the Age of Alliances: The Effects of Codesharing and Antitrust Immunity
This paper provides empirical evidence showing the effect of airline cooperation on the interline fares paid by international passengers. The analysis focuses on two measures of cooperation, codesharing and antitrust immunity, and the results show that their partial effects are both negative. The presence of codesharing on an international interline itinerary reduces the fare by 8%-17%, with the exact number depending on the sample used and the estimation method. Moreover, the presence of antitrust immunity reduces the fare by 13%-21%. Codesharing and immunity are substitutes, however, in the sense that their combined effect is smaller than the sum of their partial effects. Taking account of this difference, which is captured by an interaction variable in the regressions, the combined effect ranges between 17% and 30%. These results provide strong evidence that airline cooperation in the fare-setting process generates substantial benefits for interline passengers. © 2003 President and Fellows of Harvard College and the Massachusetts Institute of Technology.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 85 (2003)
Issue (Month): 1 (February)
|Contact details of provider:|| Web page: http://mitpress.mit.edu/journals/|
|Order Information:||Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535|
When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:85:y:2003:i:1:p:105-118. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Pollock-Nelson)
If references are entirely missing, you can add them using this form.