Incumbent Response to Entry by Low-Cost Carriers in the U.S. Airline Industry

Incumbent price response to entry by low-cost carriers in the U.S. airline industry is studied in this article. The author finds that following entry by a low-cost carrier, legacy carrier incumbents decrease their mean airfare, 10th percentile airfare, and 90th percentile airfare. Increased competition from low-cost carrier entrants leads to lower price dispersion, as suggested by the fact that airfares decrease by a larger percentage at the right tail of the incumbents' price distribution than at the left tail.


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  • Accession Number: 01609460
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 18 2016 3:41PM