INTERNATIONAL AIRFARES IN THE AGE OF ALLIANCES: THE EFFECTS OF CODESHARING AND ANTITRUST IMMUNITY

This paper gives empirical evidence showing the effect of airline cooperation on interline fares paid by international passengers. The analysis focuses on 2 measures of cooperation: codesharing and antitrust immunity, with results showing that their partial effects are both negative. The presence of codesharing on an international interline itinerary reduces the fare by 8-17%, with the exact number depending on the sample used and the estimation method. Further, the presence of antitrust immunity reduces the fare by 13-21%. Codesharing and immunity are substitutes, however, in the sense that their combined effect is smaller than the sum of their partial effects. Accounting for this difference, which is captured by an interaction variable in the regressions, the combined effect ranges from 17-30%. These results demonstrate that airline cooperation in the fare-setting process generates substantial benefits for interline passengers.

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/00346535
• Corporate Authors:

  Harvard University Press

  79 Garden Street
  Cambridge, MA  United States  02138
• Authors:
  • Brueckner, J K
• Publication Date: 2003-2

Language

• English

Media Info

• Pagination: p. 105-118
• Serial:
  • Review of Economics and Statistics
  • Volume: 85
  • Issue Number: 1
  • Publisher: Harvard University Press
  • ISSN: 0034-6535

Subject/Index Terms

• TRT Terms: Air travel; Airlines; Empirical methods; Fares; General aviation; International travel
• Subject Areas: Aviation;

Filing Info

• Accession Number: 00943663
• Record Type: Publication
• Files: TRIS
• Created Date: Jun 5 2003 12:00AM