Noteworthy: Airlines: Texas carriers fly fuller; mergers ahead
Texas-based Southwest Airlines and American Airlines have seen more passengers and fuller planes this year. Carriers experienced a summer of increased demand and strong profit growth as the U.S. airline industry healed from the recession and a rough 2009. Resurgent business travel paced the revenue and profit increases. ; Mergers promise change for Texas' airline industry. Southwest plans to take over AirTran Holdings Inc. of Atlanta and keep corporate operations in Dallas, while Houston-based Continental Airlines Inc. merged with Chicago's UAL Corp. on Oct. 1 and began relocating corporate ...
Airline deregulation: is it time to finish the job?
A critical look at the report of the National Commission to Ensure a Strong Competitive Airline Industry, including an examination of the current state of the industry and prospects for the future.
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.
Dripping red ink at 37,000 feet
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 ...
3 for the economists
International travel: double trouble
Regional airports: fear of not flying
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 ...
Auctions as a vehicle to reduce airport delays and achieve value capture
Congestion at airports imposes large costs on airlines and their passengers. A key reason for congestion is that an airline schedules its flights without regard to the costs imposed on other airlines and their passengers. As a result, during some time intervals, airlines schedule more flights to and from an airport than that airport can accommodate and flights are delayed. This paper explores how a specific market-based proposal by the Federal Aviation Administration (FAA), which includes the use of auctions to determine the right to arrive or depart in a specific time interval at airports in ...