U.S. domestic airline alliances: Does the national welfare impact turn on strategic international gains?

Research output: Contribution to journalArticle

Abstract

The six largest U.S. airlines announced in the beginning of 1998 the formation of three domestic alliances, but the size and scope of these alliances spurred significant public interest concerns. GAO analysis suggests a rough equivalence between the domestic costs and benefits of alliances, yet the international competitive effects have not been considered. I argue that the national welfare merits of domestic airline alliances turn on positive international competitive effects. Empirical tests - run on comprehensive panel data covering the international airline markets among 21 nations over the 1983-1992 period - support domestic market concentration resulting in strategic international gains; hence, domestic airline alliances likely improve national welfare.

Original languageEnglish (US)
Pages (from-to)304-314
Number of pages11
JournalContemporary Economic Policy
Volume18
Issue number3
DOIs
StatePublished - Jan 1 2000
Externally publishedYes

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Public Administration

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