Pro-Competitive Vertical Integration: The Relationship between Legacy Carriers and Regional Airlines∗
نویسنده
چکیده
This paper investigates the determinants and competitive effects of legacy carriers’ vertical integration decision with independent regional airlines. Legacy carriers allocate a larger share of their operations to an independent regional airline partner compared to their own fleet or a wholly owned regional airline on routes experiencing stronger competition. Moreover, legacy carriers’ airfares are lower on routes operated more prominently by an independent regional airline. The results suggest that increased route competition is a motivation for the growing use of independent regional airlines by legacy carriers. JEL classifications: L93, L24
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