Airline alliances and partner firms' outputs

This paper analyzes the effects of airline alliances on partner airlines' outputs by comparing traffic changes on alliance routes with those on non-alliance routes. A theoretical model of an airline alliance is developed, and an empirical analysis is then conducted using panel data from four major alliances in North Atlantic markets during the 1992-1994 period. It is found that most of the partners have greater traffic increases on their alliance routes than those on their non-alliance routes, supporting a hypothesis derived from the theoretical model. (C) 1998 Elsevier Science Ltd. All rights reserved.