Evaluating the price effects of two airline mergers in China. (September 2020)

• Record Type: Journal Article
• Authors: Ma, Wenliang; Wang, Qiang; Yang, Hangjun; Zhang, Yahua
• Is Part Of: Transportation research. Volume 141(2020)
• Publication Date: 2020-09
• Subjects: Airline merger -- Price effect -- Comparative analysis -- High-speed rail -- Overlapping network -- Complementary network; L13 -- L93; Logistics -- Periodicals; Transportation -- Periodicals; 388.011
• DOI: 10.1016/j.tre.2020.102030
• Languages: English
• ISSNs: 1366-5545

Abstract

Highlights: This paper compares the price effects of two influential airline mergers taking place in China. We offer the first comparative analysis of two different types of airline mergers in the Chinese airline market. A complementary merger could also confer an increase in market power. The negative impact of high-speed rail on fares gradually weakened after the mergers. Abstract: This paper compares the price effects of two influential airline mergers taking place in China in 2010. We offer the first comparative analysis of two different types of airline mergers in the Chinese airline market: a parallel merger and a complementary merger. With a difference-in-differences approach, we found that the two types of mergers resulted in similar pricing patterns for the airlines involved in the mergers, suggesting that complementary mergers could also confer an increase in market power. It has been found that the negative impact of high-speed rail on fares gradually weakened after the mergers.