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
Date Written: June 06, 2017
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: Suggested Citation