蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Tracing the Woes: An Empirical Analysis of the Airline Industry
蝌蚪网 Journal: Microeconomics
(pp. 1–43)
Abstract
The US airline industry went through tremendous turmoil in the early 2000s, with four major bankruptcies, two major mergers, and various changes in network structure. This paper presents a structural model of the industry, and estimates the impact of demand and supply changes on profitability. Compared with 1999, we find that, in 2006, air-travel demand was 8 percent more price sensitive, passengers displayed a stronger preference for nonstop flights, and changes in marginal cost significantly favored nonstop flights. Together with the expansion of low-cost carriers, they explain more than 80 percent of legacy carriers' variable profit reduction. (JEL L13, L25, L93)Citation
Berry, Steven, and Panle Jia. 2010. "Tracing the Woes: An Empirical Analysis of the Airline Industry." 蝌蚪网 Journal: Microeconomics 2 (3): 1–43. DOI: 10.1257/mic.2.3.1Additional Materials
JEL Classification
- L13 Oligopoly and Other Imperfect Markets
- L25 Firm Performance: Size, Diversification, and Scope
- L93 Air Transportation