In this study we address the impact of legacy-regional flight outsourcing and vertical alliances on ticket prices in the U.S.air transportation market.The sources of price premiums and airfare idiosyncrasies have been...In this study we address the impact of legacy-regional flight outsourcing and vertical alliances on ticket prices in the U.S.air transportation market.The sources of price premiums and airfare idiosyncrasies have been much debated in the literature.Market concentration,airline domination,airline share of passengers,and the presence of low-cost carriers,have been proven to influence airfares.In addition,the role of partnerships among airlines,such as alliances,code-sharing agreements,and mergers,have been demonstrated to be influential on the price heterogeneities.However,the role of flight outsourcing when legacy airlines contract flights to be operated by regional carriers has not been fully examined in the literature.In this study,we construct a 20-year quarterly panel dataset from the U.S.domestic passenger air transport market,at the route-level,to examine whether airfares are higher when the market share of regional airlines increases.Our results reveal that higher regional airline market shares are associated with higher fares on the routes where flight outsourcing occurs.展开更多
文摘In this study we address the impact of legacy-regional flight outsourcing and vertical alliances on ticket prices in the U.S.air transportation market.The sources of price premiums and airfare idiosyncrasies have been much debated in the literature.Market concentration,airline domination,airline share of passengers,and the presence of low-cost carriers,have been proven to influence airfares.In addition,the role of partnerships among airlines,such as alliances,code-sharing agreements,and mergers,have been demonstrated to be influential on the price heterogeneities.However,the role of flight outsourcing when legacy airlines contract flights to be operated by regional carriers has not been fully examined in the literature.In this study,we construct a 20-year quarterly panel dataset from the U.S.domestic passenger air transport market,at the route-level,to examine whether airfares are higher when the market share of regional airlines increases.Our results reveal that higher regional airline market shares are associated with higher fares on the routes where flight outsourcing occurs.
