TY  - BOOK
AU  - Berry,Steven
AU  - Jia,Panle
ED  - National Bureau of Economic Research.
TI  - Tracing the Woes: An Empirical Analysis of the Airline Industry 
T2  - NBER working paper series
PY  - 2008///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - November 2008; Hardcopy version available to institutional subscribers
N2  - The U.S. airline industry went through tremendous turmoil in the early 2000's. There were four major bankruptcies and two major mergers, with all legacy carriers reporting a large profit reduction. This paper presents a structural model of the airline industry, and estimates the impact of demand and supply changes on profitability. We find that, compared with the late 1990s, in 2006, a) air-travel demand was 8% more price sensitive; b) passengers displayed a strong preference for direct flights, and the connection semi-elasticity was 17% higher; c) the changes of marginal cost significantly favored direct flights. These findings are present in all the specifications we estimated. Together with the expansion of low cost carriers, they explained more than 80% of the decrease in legacy carriers' variable profits
UR  - https://www.nber.org/papers/w14503
UR  - http://dx.doi.org/10.3386/w14503
ER  -