Air South: small airline, big ambition
A young upstart in the airline business is expanding the South's flight options and might bring economic development to Columbia, S.C., as well.
Playing the pieces of New England's airport system
Hidden Baggage : Behavioral Responses to Changes in Airline Ticket Tax Disclosure
We examine the impact on air travelers of an enforcement action issued by the U.S. Department of Transportation in January 2012 that required U.S. air carriers and online travel agents to incorporate all mandatory taxes and fees into their advertised fares. Exploiting cross-itinerary ticket tax variation within international city market pairs, we provide evidence that the more prominent display of tax-inclusive prices is associated with a significant reduction in tax incidence on consumers and a decline in passenger volume along more heavily-taxed itineraries. Ticket revenues are ...
U.S. air passenger service: a taxonomy of route networks, hub locations, and competition
In this paper, we analyze the service provided by the 13 largest U.S. passenger airlines to the 100 most populous U.S. metropolitan areas in 1989. We classify the route systems by their nature and geographical extent using a variety of measures based on route-level data. We then identify individual airline hub locations and derive and calculate several measures of the extent of competition both on individual routes and at the airports in our sample. The results show the wide diversity of route networks that existed in the airline industry in 1989--a phenomenon that may help to explain the ...
TFP growth, change in efficiency, and technological progress in the U. S. airline industry: 1970 to 1981
An overview of the airline industry's early adaptations to deregulation using a best-practice cost function approach; measures cost efficiency and changes in total factor productivity growth for airlines in the 1970s and early 1980s and discusses how these findings relate to individual airline performance.
The determinants of airport hub locations, service, and competition
Although the airline industry has been studied extensively since passage of the Airline Deregulation Act of 1978, relatively little effort has gone into examining how hub location affects the level of service and degree of competition found at airports in the system. To help close this gap, we investigate the geographic distribution of airline hub operations, the level of service, and the extent of competition at 112 major U.S. airports, extending previous work by Bauer (1987) and Butler and Huston (1989). Our key innovation is that we derive our measures of service and competition from ...
The effects of competition on price dispersion in the airline industry: a panel analysis
This paper analyzes the effects of market structure on price dispersion in the airline industry, using panel data from 1993 through 2006. The results found in this paper contrast with those of Borenstein and Rose (1994), who found that price dispersion increases with competition. We find that competition has a negative effect on price dispersion, in line with the textbook treatment of price discrimination. Specifically, the effects of competition on price dispersion are most significant on routes that we identify as having consumers characterized by relatively heterogeneous elasticities of ...
Price discrimination in the airline market: the effect of market concentration
Economic theory suggests that a monopolist can price discriminate more successfully than can a perfectly competitive firm. Most real-life markets, however, fall somewhere in between the two extremes. What happens as the market becomes more competitive: Does price discrimination increase or decrease? This paper examines how price discrimination changes with market concentration in the airline market. The paper uses data on prices and ticket restrictions across various routes within the United States, controlling for distances and airport gate restrictions. Price discrimination is found to ...