A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
Codeshare restrictions as antitrust remedy
https://orcid.org/0000-0001-5424-616X
Abstract To incentivize competitive conduct, the US Department of Justice restricted codesharing between Alaska Airlines and American Airlines in several route scenarios as a condition for allowing the former to acquire Virgin Airlines. Have these restrictions incentivized competitive conduct? This paper investigates their effects on output, price, and revenue in these route scenarios. Estimation results suggest that output and price have significantly decreased, particularly for routes between the airlines' hubs or focus cities, indicating that the restrictions have not incentivized competitive conduct. Rather, the decrease in both output and price suggests that consumers’ demand has decreased. Welfare for consumers and airlines has decreased.
Highlights This study investigates merger impacts when the merging carriers are prohibited to codeshare in select markets. We find sizable decreases in output and revenue, and a mild fall in airfare on restricted routes. The merger effects are persistent and appear to be driven by restrictions on routes between the airlines' hubs/focus cities. We conclude that codeshare carve-outs may not be an effective policy tool for merger approval.
Codeshare restrictions as antitrust remedy
https://orcid.org/0000-0001-5424-616X
Abstract To incentivize competitive conduct, the US Department of Justice restricted codesharing between Alaska Airlines and American Airlines in several route scenarios as a condition for allowing the former to acquire Virgin Airlines. Have these restrictions incentivized competitive conduct? This paper investigates their effects on output, price, and revenue in these route scenarios. Estimation results suggest that output and price have significantly decreased, particularly for routes between the airlines' hubs or focus cities, indicating that the restrictions have not incentivized competitive conduct. Rather, the decrease in both output and price suggests that consumers’ demand has decreased. Welfare for consumers and airlines has decreased.
Highlights This study investigates merger impacts when the merging carriers are prohibited to codeshare in select markets. We find sizable decreases in output and revenue, and a mild fall in airfare on restricted routes. The merger effects are persistent and appear to be driven by restrictions on routes between the airlines' hubs/focus cities. We conclude that codeshare carve-outs may not be an effective policy tool for merger approval.
Codeshare restrictions as antitrust remedy
https://orcid.org/0000-0001-5424-616X
Abstract To incentivize competitive conduct, the US Department of Justice restricted codesharing between Alaska Airlines and American Airlines in several route scenarios as a condition for allowing the former to acquire Virgin Airlines. Have these restrictions incentivized competitive conduct? This paper investigates their effects on output, price, and revenue in these route scenarios. Estimation results suggest that output and price have significantly decreased, particularly for routes between the airlines' hubs or focus cities, indicating that the restrictions have not incentivized competitive conduct. Rather, the decrease in both output and price suggests that consumers’ demand has decreased. Welfare for consumers and airlines has decreased.
Highlights This study investigates merger impacts when the merging carriers are prohibited to codeshare in select markets. We find sizable decreases in output and revenue, and a mild fall in airfare on restricted routes. The merger effects are persistent and appear to be driven by restrictions on routes between the airlines' hubs/focus cities. We conclude that codeshare carve-outs may not be an effective policy tool for merger approval.
Codeshare restrictions as antitrust remedy
Le, Huubinh B. (author) / Yimga, Jules O. (author)
Transport Policy ; 138 ; 17-24
2023-05-10
8 pages
Article (Journal)
Electronic Resource
English
Antitrust policy , Air transportation , Airline codesharing , Route competition , L11 , L40 , L93 , R48
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