Pricing by International Airline Alliances: A Retrospective Study Using Supplementary Foreign-Carrier Fare Data

85 Pages Posted: 24 Jul 2019

See all articles by Jan K. Brueckner

Jan K. Brueckner

University of California, Irvine - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Ethan Singer

Compass Lexecon - Harvard Square Office

Date Written: 2019

Abstract

This study provides further empirical evidence on pricing by international airline alliances. The paper covers a long sample period, which runs from 1997 to 2016, and it supplements the usual USDOT fare data with confidential fare data reported by the foreign alliance partners of US carriers. The empirical results for connecting service match earlier findings, with alliances charging lower fares than nonaligned carriers. The GTG results imply that, in the latter part of the sample period, granting antitrust immunity to two previously nonaligned carriers is equivalent to removing a competitor, with a consequent increase in fares (an effect seldom seen in previous work).

Suggested Citation

Brueckner, Jan K. and Singer, Ethan, Pricing by International Airline Alliances: A Retrospective Study Using Supplementary Foreign-Carrier Fare Data (2019). CESifo Working Paper No. 7649. Available at SSRN: https://ssrn.com/abstract=3422230

Jan K. Brueckner (Contact Author)

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Ethan Singer

Compass Lexecon - Harvard Square Office ( email )

One Mifflin Place
Cambridge, MA 02138
United States

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