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Strategic airline alliances and the impact on passenger behavior

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Author(s): Wellington Carlos Costa

Journal: Journal of Transport Literature
ISSN 2238-1031

Volume: 4;
Issue: 1;
Start page: 96;
Date: 2010;
Original page

Keywords: alliances | codesharing | air transportation

ABSTRACT
This paper discusses one of the most important issues in the airline industry, namely, strategic alliances. One of the most recent studies surveyed here is the paper “Domestic airline alliances and consumer welfare”, developed by Olivier Armantier and Oliver Richard and published in The RAND Journal of Economics, 2008. This paper investigates consumer welfare consequences of a recent code-share agreement between Continental Airlines and Northwest Airlines using a discrete choice model based on individual flights. The results indicate some changes related to product pricing and consumer profile. The paper stresses that the alliance increased connecting passengers and decreased nonstop passengers, but did not impact consumers significantly, on average.
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