Airline deregulation: boon or bust?
An examination of the benefits and problems that have resulted from deregulation of the airline industry, with recommendations for public policy changes to preserve the benefits and to mitigate the problems.
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 ...
Regional airports: embarking on smoother skies
District airports bounce back from 2001 lows with the help of regional jet service.
Regional airports: fear of not flying
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 ...
On the record: a conversation with Herb Kelleher
When asked about the secret to Southwest Airlines' success, Herb Kelleher jokingly replies, "Charismatic leadership." Beyond that, being the only major U.S. airline to make a profit every year since 1972 has come down to three factors: having a contrarian strategy and sticking to it, keeping costs down in good times so the company is prepared for the bad times and - perhaps most important - treating employees well and trusting them to do their jobs.
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 ...
Dripping red ink at 37,000 feet
Clear skies : the fight for dominance in the airline industry
Related link(s): https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2009/spring/feature3_weblinks.cfm