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Ex-post evaluation of the American Airlines-US Airways merger: a structural approach

Author

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  • Bontemps, Christian
  • Remmy, Kevin
  • Wei, Jiangyu

Abstract

In this paper, we estimate a structural model of the domestic US airline market to analyze the effect of the recent merger between American Airlines and US Airways. Our results show that, between 2011 and 2016, a substantial fuel price drop in conjunction with changes in consumer preferences toward direct flights completely rationalizes the observed decrease in prices. However, we estimate that, during the same period, more than half of the consumer welfare increase is due, on top of these environmental changes, to the ex-post optimization of the networks of the newly merged airline and of its competitors.

Suggested Citation

  • Bontemps, Christian & Remmy, Kevin & Wei, Jiangyu, 2021. "Ex-post evaluation of the American Airlines-US Airways merger: a structural approach," TSE Working Papers 21-1258, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:126153
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    1. is not listed on IDEAS
    2. Wu, Xiangru & Wang, Kun & Fu, Xiaowen & Dong, Kangyin & Sun, Xiaoqian & Hoon Oum, Tae, 2025. "How does COVID-19 pandemic affect airline’s route choice and market contact? − Full-service carriers vs. low-cost carriers in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 191(C).
    3. Abate, Megersa Abera & Barattieri, Alessandro & Brugnoli, Alberto & Porta, Flavio, 2025. "Decarbonizing Air Transport : Insights from a Quasi-Experiment," Policy Research Working Paper Series 11183, The World Bank.
    4. Christian Bontemps & Cristina Gualdani & Kevin Remmy, 2023. "Price Competition and Endogenous Product Choice in Networks: Evidence From the US Airline Industry," CRC TR 224 Discussion Paper Series crctr224_2023_400, University of Bonn and University of Mannheim, Germany.
    5. Christian Bontemps & Gianmaria Martini & Flavio Porta, 2024. "The Effects of LCCs Subsidies on the Tourism Industry ," Working Papers hal-04709694, HAL.

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