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Economies of scale in the US airline industry

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  • Johnston, Ahren
  • Ozment, John

Abstract

This study investigates economies of scale in the US airline industry using annual data, from 1987 to 2009, on the largest airlines. The paper estimates both a translog and Cobb–Douglas model of both an economic and transportation definition of economies of scale. The study shows that the results from models based on the two definitions are remarkably similar except during rapid growth in output and that the largest US airlines operate under modest scale economies.

Suggested Citation

  • Johnston, Ahren & Ozment, John, 2013. "Economies of scale in the US airline industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 51(C), pages 95-108.
    • Handle: RePEc:eee:transe:v:51:y:2013:i:c:p:95-108
    DOI: 10.1016/j.tre.2012.09.002
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