Download this Paper Open PDF in Browser

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

XREAP No. 2011-01

32 Pages Posted: 23 May 2011 Last revised: 27 May 2011

Xavier Fageda

University of Barcelona - Department of Economic Policy

Jordi Perdiguero

Autonomous University of Barcelona - Department of Applied Economics

Date Written: May 17, 2011

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.

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

JEL Classification: L93, L41, L44

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: https://ssrn.com/abstract=1844891 or http://dx.doi.org/10.2139/ssrn.1844891

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

Paper statistics

Downloads
205
Rank
125,473
Abstract Views
871