"US domestic airline mergers: the neglected internaitonal determinants"JEL codes: L13, F14, L93
Abstract: The existing literature on domestic-airline mergers focuses on domestic competitive incentives determining merger behavior and neglects the impact of international competitive incentives. I argue that domestic airline mergers increase international efficiency-via the enhancement of domestic networks and the elimination of domestic competition-which correspondingly leads to an improved international competitive position. Comprehensive panel data-covering international airline markets between the US and twenty nations over the 1984-1992 period-allows testing this argument. The results support both domestic mergers and large domestic networks improving the international competitive position of airlines.