Journal article

Impacts of code-share alliances on airline cost structure: A truncated third-order translog estimation

Mark Goh, Jongsay Yong

International Journal of Industrial Organization | ELSEVIER SCIENCE BV | Published : 2006


The airline industry has undergone significant changes following deregulation more than a decade ago. A prominent development in recent years has been the proliferation of airline alliances. An important question arises: are alliances cost savings or competition reducing? This paper addresses the first part of the question. However, the answer has bearing on the second part as well, since results in industrial economics suggest that, unless a merger (or alliance) can substantially reduce costs, consumers are unlikely to enjoy lower prices [e.g., Farrell, J. and C. Shapiro (1990), "Horizontal mergers: An equilibrium analysis," American Economic Review, 80(1), 107-26]. This paper estimates a t..

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