A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008

A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008

The airline industry has performed inconsistently since deregulation in 1978 and there has been a significant profit discrepancy between legacy airlines and low-cost carriers. Starting from the early 2000s, four of the largest legacy airlines chose to consolidate with an effort to increase efficiency and profitability. Delta Air Lines and Northwest Airlines have consolidated in 2008, becoming the largest commercial airline in the world. This paper examined the merger effect on the airfares on top 1,000 U.S. domestic city-pair routes in relation to the number of passengers, the distance, and the market share as well as its potential anticompetitive issues. All airlines were categorized into three groups - Legacy Airlines, Delta-Northwest, and Low-Cost Carriers - and the interactions between the airfares and the variables were examined within each airline group and across different airline groups. It was found that the airfares of legacy airlines and Delta-Northwest decreased at a faster rate than the low-cost carriers while their market shares increased simultaneously irrespective of whether they offered the lowest prices or had the largest market share on each route.

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Main Author: Park,Sora
Format: Digital revista
Language:English
Published: Sociedade Brasileira de Planejamento dos Transportes 2014
Online Access:http://old.scielo.br/scielo.php?script=sci_arttext&pid=S2238-10312014000200004
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spelling oai:scielo:S2238-103120140002000042014-02-05A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008Park,Sora airline industry merger/consolidation legacy airlines low-cost carriers antitrust The airline industry has performed inconsistently since deregulation in 1978 and there has been a significant profit discrepancy between legacy airlines and low-cost carriers. Starting from the early 2000s, four of the largest legacy airlines chose to consolidate with an effort to increase efficiency and profitability. Delta Air Lines and Northwest Airlines have consolidated in 2008, becoming the largest commercial airline in the world. This paper examined the merger effect on the airfares on top 1,000 U.S. domestic city-pair routes in relation to the number of passengers, the distance, and the market share as well as its potential anticompetitive issues. All airlines were categorized into three groups - Legacy Airlines, Delta-Northwest, and Low-Cost Carriers - and the interactions between the airfares and the variables were examined within each airline group and across different airline groups. It was found that the airfares of legacy airlines and Delta-Northwest decreased at a faster rate than the low-cost carriers while their market shares increased simultaneously irrespective of whether they offered the lowest prices or had the largest market share on each route.info:eu-repo/semantics/openAccessSociedade Brasileira de Planejamento dos TransportesJournal of Transport Literature v.8 n.2 20142014-04-01info:eu-repo/semantics/articletext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S2238-10312014000200004en10.1590/S2238-10312014000200004
institution SCIELO
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country Brasil
countrycode BR
component Revista
access En linea
databasecode rev-scielo-br
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region America del Sur
libraryname SciELO
language English
format Digital
author Park,Sora
spellingShingle Park,Sora
A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008
author_facet Park,Sora
author_sort Park,Sora
title A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008
title_short A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008
title_full A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008
title_fullStr A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008
title_full_unstemmed A merger effect on different airline groups: empirical study on the Delta-Northwest merger in 2008
title_sort merger effect on different airline groups: empirical study on the delta-northwest merger in 2008
description The airline industry has performed inconsistently since deregulation in 1978 and there has been a significant profit discrepancy between legacy airlines and low-cost carriers. Starting from the early 2000s, four of the largest legacy airlines chose to consolidate with an effort to increase efficiency and profitability. Delta Air Lines and Northwest Airlines have consolidated in 2008, becoming the largest commercial airline in the world. This paper examined the merger effect on the airfares on top 1,000 U.S. domestic city-pair routes in relation to the number of passengers, the distance, and the market share as well as its potential anticompetitive issues. All airlines were categorized into three groups - Legacy Airlines, Delta-Northwest, and Low-Cost Carriers - and the interactions between the airfares and the variables were examined within each airline group and across different airline groups. It was found that the airfares of legacy airlines and Delta-Northwest decreased at a faster rate than the low-cost carriers while their market shares increased simultaneously irrespective of whether they offered the lowest prices or had the largest market share on each route.
publisher Sociedade Brasileira de Planejamento dos Transportes
publishDate 2014
url http://old.scielo.br/scielo.php?script=sci_arttext&pid=S2238-10312014000200004
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AT parksora mergereffectondifferentairlinegroupsempiricalstudyonthedeltanorthwestmergerin2008
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