The effects of mergers on price and output: Two case studies from the airline industry

The effects of mergers on price and output: Two case studies from the airline industry

The literature on industrial organization contains very little direct evidence on the effects of actual mergers. This study estimates the effects of two recent airline mergers approved by the Department of Transportation over the objection of the Department of Justice. The merger of TWA and Ozark ap...

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Veröffentlicht in:Managerial and decision economics 1991-10, Vol.12 (5), p.341-352
Hauptverfasser: Werden, Gregory J., Joskow, Andrew S., Johnson, Richard L.
Format: Artikel
Sprache:eng
Schlagworte:
Acquisitions & mergers
Air fares
Air transport
Air transportation industry
Air travel
Aircraft
Airline industry
Airlines
Airports
Antitrust
Business consolidation
Case studies
City pairs
Comparative studies
Competition
Consolidation and mergers
Cost efficiency
Cost estimates
Economic models
Effects
Efficiency, Industrial
Fares
Financial market structures
Forecasting
Incumbency
Incumbents
Linear regression
Manycompanies
Passengers
Prices
Regression analysis
Transportation sector
United States
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Zusammenfassung:The literature on industrial organization contains very little direct evidence on the effects of actual mergers. This study estimates the effects of two recent airline mergers approved by the Department of Transportation over the objection of the Department of Justice. The merger of TWA and Ozark appears to have caused a slight increase in fares and a far greater reduction in service on city pairs out of St Louis. The merger of Northwest and Republic appears to have caused a significant increase in fares and a significant reduction in overall service on city pairs out of Minneapolis-St Paul.
ISSN:0143-6570
1099-1468
DOI:10.1002/mde.4090120502