Assessing the Price Effects of Airline Alliances on Parallel Routes

Xiang Wan, Li Zou, and Martin Dresner. 2009. Assessing the Price Effects of Airline Alliances on Parallel Routes. Transportation Research, Part E: Logistics and Transportation Review Vol. 45(4), 627-641.

34 Pages Posted: 31 May 2016

See all articles by Xiang Wan

Xiang Wan

Ohio State University (OSU) - Department of Marketing and Logistics

Zou Li

Embry-Riddle Aeronautical University

Martin E. Dresner

University of Maryland

Date Written: Nov 30, 2008

Abstract

The impact of airline alliances on airfares on nonstop hub-to-hub routes is investigated. Analytical results suggest that the net effect on airfares is uncertain. Empirical evidence shows that the impact of two of three alliances (Star and SkyTeam) on prices on transatlantic hub-to-hub routes is insignificant after controlling for other factors. Routes between oneworld alliance hubs, however, have significantly lower business class airfares compared to other routes. These results indicate that the impact of alliances on transatlantic hub-to-hub airfares varies depending on the alliance; possibly due to the ability of an alliance to coordinate fares.

Keywords: Alliances; Airlines; Competitive Strategy; Pricing

Suggested Citation

Wan, Xiang and Li, Zou and Dresner, Martin E., Assessing the Price Effects of Airline Alliances on Parallel Routes (Nov 30, 2008). Xiang Wan, Li Zou, and Martin Dresner. 2009. Assessing the Price Effects of Airline Alliances on Parallel Routes. Transportation Research, Part E: Logistics and Transportation Review Vol. 45(4), 627-641.. Available at SSRN: https://ssrn.com/abstract=2786723

Xiang Wan (Contact Author)

Ohio State University (OSU) - Department of Marketing and Logistics ( email )

Fisher Hall 524
2100 Neil Ave
Columbus, OH 43210
United States

Zou Li

Embry-Riddle Aeronautical University ( email )

600 South Clyde Morris Blvd.
Daytona Beach, FL 32114
United States

Martin E. Dresner

University of Maryland ( email )

College Park
College Park, MD 20742
United States

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