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A platform for research: civil engineering, architecture and urbanism
Profit margins in U.S. domestic airline routes
Abstract This paper estimates profit margins in the U.S. airline industry at the domestic route level. The dynamic estimation methodology used not only is robust to any simultaneity/endogeneity bias by construction but also results in profit margin estimates that are highly consistent with actual profit data from the U.S. airline industry. Estimated annual profit margins have an average of about 13.3%, with a range between 2.7% and 42.9% across routes. A cross-route analysis further suggests that annual profit margins increase with the market share of the largest airline serving the route, whereas they decrease with airfare. Important policy suggestions follow.
Highlights Profit margins in the U.S. airline industry are estimated at the domestic route level. Profit margins have an average of about 13.3% across routes. Profit margins range between 2.7% and 42.9% across routes. Profit margins increase with the market share of the largest airline serving the route.
Profit margins in U.S. domestic airline routes
Abstract This paper estimates profit margins in the U.S. airline industry at the domestic route level. The dynamic estimation methodology used not only is robust to any simultaneity/endogeneity bias by construction but also results in profit margin estimates that are highly consistent with actual profit data from the U.S. airline industry. Estimated annual profit margins have an average of about 13.3%, with a range between 2.7% and 42.9% across routes. A cross-route analysis further suggests that annual profit margins increase with the market share of the largest airline serving the route, whereas they decrease with airfare. Important policy suggestions follow.
Highlights Profit margins in the U.S. airline industry are estimated at the domestic route level. Profit margins have an average of about 13.3% across routes. Profit margins range between 2.7% and 42.9% across routes. Profit margins increase with the market share of the largest airline serving the route.
Profit margins in U.S. domestic airline routes
Yilmazkuday, Hakan (author)
Transport Policy ; 114 ; 245-251
2021-10-14
7 pages
Article (Journal)
Electronic Resource
English
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