From the Fringe to the Forefront: Low Cost Carriers and Airline Price Determination

Low-cost carriers (LCCs) have transformed the US airline industry. They are now much larger and have moved into more direct competition with legacy carriers. This paper re-examines airline fare determination in this transformed industry. It finds that LCCs have a much larger fare impact than do legacies, but that their fare-reducing effect diminishes as they become dominant on a route. It also finds that legacy carriers primarily affect each others’ prices, whereas LCCs have a significant impact on pricing by both other LCCs and legacies. These and other results suggest a new and more nuanced role for LCCs in the domestic airline industry.

Language

  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 01677578
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jul 31 2018 12:30PM