Assessing the price effects of airline alliances on parallel routes

The impact of airline alliances on airfares on nonstop hub-to-hub routes is investigated. Analytical results suggest that the net effect on airfares is uncertain. Empirical evidence shows that the impact of two of three alliances (Star and SkyTeam) on prices on transatlantic hub-to-hub routes is ins...

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Published inTransportation research. Part E, Logistics and transportation review Vol. 45; no. 4; pp. 627 - 641
Main Authors Wan, Xiang, Zou, Li, Dresner, Martin
Format Journal Article
LanguageEnglish
Published Exeter Elsevier India Pvt Ltd 01.07.2009
Elsevier
Elsevier Sequoia S.A
SeriesTransportation Research Part E: Logistics and Transportation Review
Subjects
Air fares
Airlines
Alliances
Alliances Airlines Competitive strategy Pricing
Competitive strategy
Impact analysis
Pricing
Routes
Studies
Transportation terminals
Airlines
Competitive strategy
Alliances
Pricing
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Summary:The impact of airline alliances on airfares on nonstop hub-to-hub routes is investigated. Analytical results suggest that the net effect on airfares is uncertain. Empirical evidence shows that the impact of two of three alliances (Star and SkyTeam) on prices on transatlantic hub-to-hub routes is insignificant after controlling for other factors. Routes between oneworld alliance hubs, however, have significantly lower business class airfares compared to other routes. These results indicate that the impact of alliances on transatlantic hub-to-hub airfares varies depending on the alliance; possibly due to the ability of an alliance to coordinate fares.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:1366-5545
1878-5794
DOI:10.1016/j.tre.2009.01.003