European airline mergers, alliance consolidation, and consumer welfare

J.K. Brueckner, E. Pels

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper explores the effects of a European airline merger followed by a consolidation of two competing international alliances. The exercise has been inspired by the Air France-KLM merger, which is expected to spur consolidation of the Northwest-KLM and SkyTeam alliances into a single mega-alliance. The results of the analysis show that, although the airlines benefit through higher profits, the merger and alliance consolidation harm consumers while reducing overall social surplus. The reason for this negative outcome is that, as modeled, all the effects of the merger and alliance consolidation are anticompetitive. © 2004 Elsevier Ltd. All rights reserved.
Original languageEnglish
Pages (from-to)27-41
Number of pages14
JournalJournal of Air Transport Management
Volume11
Issue number1
DOIs
Publication statusPublished - 2005

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