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Are legacy airline mergers pro- or anti-competitive? Evidence from recent U.S. airline mergers

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  • Carlton, Dennis
  • Israel, Mark
  • MacSwain, Ian
  • Orlov, Eugene

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.

Suggested Citation

  • Carlton, Dennis & Israel, Mark & MacSwain, Ian & Orlov, Eugene, 2019. "Are legacy airline mergers pro- or anti-competitive? Evidence from recent U.S. airline mergers," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 58-95.
    • Handle: RePEc:eee:indorg:v:62:y:2019:i:c:p:58-95
    DOI: 10.1016/j.ijindorg.2017.12.002
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    Cited by:

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    6. Bontemps, Christian & Remmy, Kevin & Wei, Jiangyu, 2021. "Ex-post evaluation of the American Airlines-US Airways merger: a structural approach," TSE Working Papers 21-1258, Toulouse School of Economics (TSE).
    7. Li, Lu & Wan, Yulai & Yang, Dong, 2024. "Do shipping alliances affect freight rates? Evidence from global satellite ship data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
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    10. Dennis W. Carlton, 2024. "The 2023 Merger Guidelines: A Critical Assessment," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(1), pages 129-145, August.

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    More about this item

    Keywords

    Airline Mergers; Antitrust Policy; Merger Retrospective;
    All these keywords.

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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