Tracing the Woes: An Empirical Analysis of the Airline Industry

• 成果类型: Article
• 署名作者: Berry, Steven; Jia, Panle
• 署名单位: Yale University; Massachusetts Institute of Technology (MIT)
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.2.3.1
• 发表日期: 2010
• 页码: 1-43
• 关键词: performance; COMPETITION; entry

摘要

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.