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Fare impacts of Southwest Airlines: A comparison of nonstop and connecting flights

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  • Ren, Junqiushi

Abstract

This paper examines the effects of Southwest Airlines' entry on its rivals' pricing, with a focus on comparing nonstop and connecting flights. The results produce two important findings. First, Southwest's nonstop entry depressed its rivals' nonstop airfares and connecting airfares. Second, Southwest's connecting entry depressed its rivals' connecting airfares, but did not depress their nonstop airfares. Considering nonstop and connecting services as differentiated products which differ in quality, the findings suggest that firms have quite different fare strategies upon the entry of different quality products.

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  • Ren, Junqiushi, 2020. "Fare impacts of Southwest Airlines: A comparison of nonstop and connecting flights," Journal of Air Transport Management, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:jaitra:v:84:y:2020:i:c:s0969699719304594
    DOI: 10.1016/j.jairtraman.2020.101771
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    References listed on IDEAS

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