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Competitive Impact of the 1,500-Hour Rule on U.S. Airlines : Evidence from U.S.–Canada and U.S.–Mexico Markets

Author

Listed:
  • Markiewicz, Zuzanna

    (University of Warwick)

Abstract

This study examines whether the 2013 FAA First Officer Qualifications (1,500-hour) rule reshaped competitive dynamics across U.S. legacy and regional carriers, measured by group-level mean changes in offered seat capacity relative to Mexican and Canadian carriers outside the rule’s jurisdiction. Triple-Difference and Difference-in-Differences models are estimated on an airport-pair–carrier–month–year-level data on passenger flights on bidirectional U.S.–Canada and U.S.–Mexico routes market from 2012 to 2014. On average, post-policy, the U.S. legacy–regional capacity gap in offered seats widened by 46% relative to the corresponding foreign legacy–regional gap. U.S. regional carriers reduced offered seats by 19% relative to foreign regional carriers, while U.S. legacy carriers increased offered seats by 34% relative to foreign legacy carriers. Overall, the safety-oriented tightening of pilot-qualification requirements appears to have produced unintended competitive spillovers with asymmetric effects, consistent with wage-sensitive U.S. regional airlines curtailing operations and larger-scale U.S. legacy carriers gaining market power.

Suggested Citation

  • Markiewicz, Zuzanna, 2026. "Competitive Impact of the 1,500-Hour Rule on U.S. Airlines : Evidence from U.S.–Canada and U.S.–Mexico Markets," Warwick-Monash Economics Student Papers 97, Warwick Monash Economics Student Papers.
    • Handle: RePEc:wrk:wrkesp:97
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    Keywords

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    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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