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Are Legacy Airline Mergers Pro- or Anti-Competitive? Evidence from Recent U.S. Airline Mergers

58 Pages Posted: 18 Oct 2016 Last revised: 7 Jun 2017

Dennis W. Carlton

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Mark A. Israel

Compass Lexecon

Ian MacSwain

Compass Lexecon

Eugene Orlov

Compass Lexecon

Date Written: June 06, 2017

Abstract

Due to a series of recent mergers, the number of legacy airlines in the United States has decreased from six to three. We conduct a comprehensive investigation of the effect on fares and output of these legacy airline mergers to determine whether the mergers have had an overall pro-competitive or anti-competitive effect on consumers. Our difference-in-differences regression analysis shows that these mergers have been pro-competitive, with no significant adverse effect on nominal fares and with significant increases in passenger traffic as well as capacity. Taken together, the results indicate that the recent legacy mergers were pro-competitive.

Keywords: Airline Mergers, Antitrust Policy, Merger Retrospective

JEL Classification: L41, L93

Suggested Citation

Carlton , Dennis W. and Israel, Mark A. and MacSwain, Ian and Orlov, Eugene, Are Legacy Airline Mergers Pro- or Anti-Competitive? Evidence from Recent U.S. Airline Mergers (June 06, 2017). Available at SSRN: https://ssrn.com/abstract=2851954

Dennis Carlton

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
312-322-0215 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mark Israel

Compass Lexecon ( email )

United States

Ian MacSwain

Compass Lexecon ( email )

Compass Lexecon
332 S. Michigan Avenue
Chicago, IL Illinois 60604
United States
312-322-0259 (Phone)

HOME PAGE: http://www.compasslexecon.com/professionals/bio?id=229

Eugene Orlov (Contact Author)

Compass Lexecon ( email )

332 S. Michigan St., #1300
Chicago, IL 60604
United States
312-322-0265 (Phone)

HOME PAGE: http://www.compasslexecon.com/professionals/bio?id=56

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