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
Date Written: Nov 30, 2008
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
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