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Free Content An Empirical Analysis of a Merger Between a Network and Low-cost Airlines

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We use a difference-in-difference estimator to examine the effects of a merger between three airline companies on two types of route: (1) on those where two low-cost carriers and (2) on those where a network carrier and one of the low-cost airlines had previously been competing. We report a reduction in flight frequencies but find no substantial effect on prices in the first case, while in the second we report an increase in prices but no substantial effect on frequencies. The results would seem to be attributable to the differences in the types of passenger flying these routes.
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Document Type: Research Article

Publication date: January 1, 2014

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