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Network Structure and Consolidation in the U.S. Airline Industry, 1990-2015

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  • Ciliberto, Federico
  • Cook, Emily
  • Williams, Jonathan

Abstract

We study the effect of consolidation on airline network connectivity using three measures of centrality from graph theory: Degree, Closeness, and Betweenness. Changes in these measures from 1990 to 2015 imply: i) the average airport services a greater proportion of possible routes, ii) the average origin airport is fewer stops away from any given destination, and iii) the average hub is less often along the shortest route between two other airports. Yet, we find the trend toward greater connectivity in the national network structure is largely una ffected by consolidation, in the form of mergers and codeshare agreements, during this period.

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  • Ciliberto, Federico & Cook, Emily & Williams, Jonathan, 2017. "Network Structure and Consolidation in the U.S. Airline Industry, 1990-2015," CEPR Discussion Papers 12485, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12485
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    Cited by:

    1. Gaurab Aryal & Federico Ciliberto & Benjamin T Leyden, 2022. "Coordinated Capacity Reductions and Public Communication in the Airline Industry [Exchangees of Cost Information in the Airline Industry]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(6), pages 3055-3084.
    2. Cheung, Tommy K.Y. & Wong, Collin W.H. & Zhang, Anming, 2020. "The evolution of aviation network: Global airport connectivity index 2006–2016," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    3. Wolter, Alexander H. & Ehlers, Thorsten & Luetjens, Klaus & Gollnick, Volker, 2021. "Commodity price pass-through in the US airline industry and the hidden perks of consolidation," Journal of Air Transport Management, Elsevier, vol. 95(C).
    4. Pavlović, Dejan & Babić, Danica, 2018. "Recent trends in assessment of proposed consolidations in EU airline industry – From discretion to arbitrariness," Transport Policy, Elsevier, vol. 69(C), pages 65-77.
    5. Patrick Dennis & Kristopher Gerardi & Carola Schenone, 2022. "Common Ownership Does Not Have Anticompetitive Effects in the Airline Industry," Journal of Finance, American Finance Association, vol. 77(5), pages 2765-2798, October.
    6. Patrick Dennis & Kristopher Gerardi & Carola Schenone, 2019. "Common Ownership Does Not Have Anti-Competitive Effects in the Airline Industry," FRB Atlanta Working Paper 2019-15, Federal Reserve Bank of Atlanta.

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    More about this item

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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