Examining the Coordinated Effects of the AA/USAir Merger

40 Pages Posted: 2 Jul 2021 Last revised: 22 Jan 2022

See all articles by Soo Jin Kim

Soo Jin Kim

Government of Canada - Bank of Canada

Yongjoon Park

University of Maryland; University of Massachusetts Amherst

Date Written: January 21, 2022

Abstract

This paper studies the coordinated effects of the merger between American Airlines and US Airways by examining the extent to which the connecting prices of nonmerging legacy carriers evolved when the merger eliminated Advantage Fares, a connecting flight price discounting program offered by US Airways. In our empirical analysis, we find that postmerger nonmerging legacy carriers substantially increased their connecting prices on routes where US Airways had a dominant position. From our theoretical analysis, these empirical findings can be explained by the merger’s coordinated effects. Finally, we note the potential importance of connecting services in merger analysis.

Keywords: Airline Mergers, Merger Analysis, Coordinated Effects

JEL Classification: L93, L41, L44

Suggested Citation

Kim, Soo Jin and Park, Yongjoon and Park, Yongjoon, Examining the Coordinated Effects of the AA/USAir Merger (January 21, 2022). ShanghaiTech SEM Working Paper No. 2021-006, Available at SSRN: https://ssrn.com/abstract=3877895 or http://dx.doi.org/10.2139/ssrn.3877895

Soo Jin Kim (Contact Author)

Government of Canada - Bank of Canada ( email )

234 Wellington Street
Ontario, Ottawa K1A 0G9
Canada

Yongjoon Park

University of Maryland

University of Massachusetts Amherst ( email )

Stockbridge Hall
80 Campus Center Way
Amherst, MA 01003
United States

HOME PAGE: http://https://www.yongjoonpark.com

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
164
Abstract Views
699
rank
254,600
PlumX Metrics