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Assessing the price effects of airline alliances on parallel routes

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  • Wan, Xiang
  • Zou, Li
  • Dresner, Martin

Abstract

The impact of airline alliances on airfares on nonstop hub-to-hub routes is investigated. Analytical results suggest that the net effect on airfares is uncertain. Empirical evidence shows that the impact of two of three alliances (Star and SkyTeam) on prices on transatlantic hub-to-hub routes is insignificant after controlling for other factors. Routes between oneworld alliance hubs, however, have significantly lower business class airfares compared to other routes. These results indicate that the impact of alliances on transatlantic hub-to-hub airfares varies depending on the alliance; possibly due to the ability of an alliance to coordinate fares.

Suggested Citation

  • Wan, Xiang & Zou, Li & Dresner, Martin, 2009. "Assessing the price effects of airline alliances on parallel routes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(4), pages 627-641, July.
    • Handle: RePEc:eee:transe:v:45:y:2009:i:4:p:627-641
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    Cited by:

    1. Min, Hokey & Joo, Seong-Jong, 2016. "A comparative performance analysis of airline strategic alliances using data envelopment analysis," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 99-110.
    2. Czerny, Achim I. & Jost, Peter-J. & Lang, Hao & Mantin, Benny, 2021. "Carrier collaboration with endogenous networks: Or, the limits of what carrier collaboration can achieve under antitrust immunity," Journal of Air Transport Management, Elsevier, vol. 94(C).
    3. Ismail, Noor Azina & Jenatabadi, Hashem Salarzadeh, 2014. "The influence of firm age on the relationships of airline performance, economic situation and internal operation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 212-224.
    4. Shamita Garg & Vikas Thakur, 2021. "Modeling the Factors of Productivity in Airline Industry in India: A Hybrid TISM-P and Fuzzy-MICMAC Approach," International Journal of Global Business and Competitiveness, Springer, vol. 16(1), pages 39-47, December.
    5. Peng, I-Chin & Lu, Hua-An, 2022. "Coopetition effects among global airline alliances for selected Asian airports," Journal of Air Transport Management, Elsevier, vol. 101(C).
    6. João P. Pita & Cynthia Barnhart & António P. Antunes, 2013. "Integrated Flight Scheduling and Fleet Assignment Under Airport Congestion," Transportation Science, INFORMS, vol. 47(4), pages 477-492, November.
    7. Xing Hu & René Caldentey & Gustavo Vulcano, 2013. "Revenue Sharing in Airline Alliances," Management Science, INFORMS, vol. 59(5), pages 1177-1195, May.
    8. Morlotti, Chiara & Redondi, Renato, 2023. "The impact of COVID-19 on airlines’ price curves," Journal of Air Transport Management, Elsevier, vol. 107(C).
    9. Volodymyr Bilotkach, 2019. "Airline Partnerships, Antitrust Immunity, and Joint Ventures: What We Know and What I Think We Would Like to Know," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 54(1), pages 37-60, February.
    10. Adler, Nicole & Hanany, Eran, 2016. "Regulating inter-firm agreements: The case of airline codesharing in parallel networks," Transportation Research Part B: Methodological, Elsevier, vol. 84(C), pages 31-54.
    11. Douglas, Ian & Tan, David, 2017. "Global airline alliances and profitability: A difference-in-difference analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 432-443.
    12. Lin, Ming Hsin, 2021. "Airport pricing and capacity: Schedule versus congestion delays," Research in Transportation Economics, Elsevier, vol. 90(C).
    13. Castiglioni, Marco & Gallego, à ngeles & Galán, José Luis, 2018. "The virtualization of the airline industry: A strategic process," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 134-145.
    14. Fageda, Xavier & Flores-Fillol, Ricardo & Lin, Ming Hsin, 2020. "Vertical differentiation and airline alliances: The effect of antitrust immunity," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    15. Adler, Nicole & Mantin, Benny, 2015. "Government and company contracts: The effect on service and prices in international airline markets," Economics of Transportation, Elsevier, vol. 4(3), pages 166-177.
    16. 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).
    17. Yu, Ming-Miin & Rakshit, Ipsita, 2024. "How to establish input and output targets for airlines with heterogeneous production technologies: A nash bargaining DEA approach within the meta-frontier framework," Journal of Air Transport Management, Elsevier, vol. 116(C).
    18. Zhang, Shengrun & Fuellhart, Kurt & Yang, Wendong & Tang, Xiaowei & Witlox, Frank, 2019. "Factors shaping non-stop airline services in the transatlantic air transport market: 2015–2017," Journal of Transport Geography, Elsevier, vol. 80(C).
    19. Brueckner, Jan K. & Singer, Ethan, 2019. "Pricing by international airline alliances: A retrospective study," Economics of Transportation, Elsevier, vol. 20(C).
    20. Brueckner, Jan K. & Flores-Fillol, Ricardo, 2020. "Market structure and quality determination for complementary products: Alliances and service quality in the airline industry," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    21. Yu, Ming-Miin & Chen, Li-Hsueh & Chiang, Hui, 2017. "The effects of alliances and size on airlines’ dynamic operational performance," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 197-214.
    22. Button, Kenneth & Porta, Flavio & Scotti, Davide, 2020. "The role of strategic airline alliances in Africa," MPRA Paper 108265, University Library of Munich, Germany.
    23. Zou, Li & Chen, Xueqian, 2017. "The effect of code-sharing alliances on airline profitability," Journal of Air Transport Management, Elsevier, vol. 58(C), pages 50-57.
    24. Hong Guan & Hao Liu & Raafat George Saadé, 2022. "Analysis of Carbon Emission Reduction in International Civil Aviation through the Lens of Shared Triple Bottom Line Value Creation," Sustainability, MDPI, vol. 14(14), pages 1-21, July.
    25. Menezes Bezerra Sampaio, Raquel & Urdanoz, Miguel, 2022. "Airlines' cooperation in the US domestic market: Measuring the evolution of price gaps," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 424-443.

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