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.

• Record URL:
  https://doi.org/10.1002/soej.12117
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/00384038
• Authors:
  • Tan, Kerry M
• Publication Date: 2016

Language

• English

Media Info

• Media Type: Web
• Features: References;
• Pagination: pp 874-892
• Serial:
  • Southern Economic Journal
  • Volume: 82
  • Issue Number: 3
  • Publisher: Southern Economic Association
  • ISSN: 0038-4038
  • EISSN: 2325-8012
  • Serial URL: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)2325-8012

Subject/Index Terms

• TRT Terms: Airlines; Dispersion (Statistics); Fares; Full service carriers; Low cost carriers; Markets; Prices
• Geographic Terms: United States
• Subject Areas: Aviation; Economics; Finance; Passenger Transportation;

Filing Info

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