Abstract

http://ssrn.com/abstract=1844891
 
 

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An Empirical Analysis of a Merger between a Network and Low-Cost Airlines


Xavier Fageda


University of Barcelona - Department of Economic Policy

Jordi Perdiguero


Autonomous University of Barcelona - Department of Applied Economics

May 17, 2011

XREAP No. 2011-01

Abstract:     
We use a difference-in-difference estimator to examine the effects of a merger involving three airlines. The novelty lies in the examination of this operation in two distinct scenarios: (1) on routes where two low-cost carriers and (2) on routes where a network and one of the low-cost airlines had previously been competing. We report a reduction in frequencies but no substantial effect on prices in the first scenario, while in the second we report an increase in prices but no substantial effect on frequencies. These results may be attributed to the differences in passenger types flying on these routes.

Number of Pages in PDF File: 32

Keywords: Mergers, Airline Market, Low-Cost Carriers, Difference-in-Difference

JEL Classification: L93, L41, L44

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Date posted: May 23, 2011 ; Last revised: May 27, 2011

Suggested Citation

Fageda, Xavier and Perdiguero, Jordi, An Empirical Analysis of a Merger between a Network and Low-Cost Airlines (May 17, 2011). XREAP No. 2011-01. Available at SSRN: http://ssrn.com/abstract=1844891 or http://dx.doi.org/10.2139/ssrn.1844891

Contact Information

Xavier Fageda (Contact Author)
University of Barcelona - Department of Economic Policy ( email )
Av. Diagonal 690
08034 Barcelona
Spain
0034 934021947 (Phone)
0034 934024573 (Fax)
Jordi Perdiguero
Autonomous University of Barcelona - Department of Applied Economics ( email )
Departamento de Economía Aplicada
Bellaterra, Barcelona 08193
Spain
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