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The Impact of Service at Neighboring Airports on Airline Ticket Prices: An Analysis of the American Airlines and US Airways Merger

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Abstract

Following research by Zhang & Nozick (2018) and Li (2018) on the long-term impacts of the merger of American Airlines and US Airways, this study looks into the impact of competition from adjacent airports and alternative routes. To measure geographical competition between airports, every airport within a circle of 60 miles radius centered at the origin or destination airport is defined as an adjacent airport. The analysis shows that a higher number of an origin’s or a destination’s adjacent airports correlates to a decline in fares. However, an origin’s adjacent airports have a more notable fare impact than do those of the destination. Additionally, the number of low-cost airlines offering services from the origin’s adjacent airports to the same destination puts downward pressure on airfares. Meanwhile, legacy carriers at adjacent airports have a very limited impact on price increases. Lastly, the number of low-cost carrier services at adjacent airports suppresses the pricing increases in legacy airlines but promotes the pricing decreases in low-cost airlines.

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30 pages

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2020-12

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Committee Chair

Nozick, Linda K.

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Committee Member

Daziano, Ricardo

Degree Discipline

Civil and Environmental Engineering

Degree Name

M.S., Civil and Environmental Engineering

Degree Level

Master of Science

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Government Document

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Attribution 4.0 International

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dissertation or thesis

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