Abstract
The article studies the evolution of the domestic U.S. airline industry from 1995 to 2009 using T-100 traffic data and DB1B fare data from the U.S. Department of Transportation. Unlike previous studies, a consistent split of the analysis in network carriers and low cost carriers is introduced. Based on a differentiation in market size and major players, concentration, fares, service, costs and profits, we find that the competitive interaction between network carriers and low cost carriers increased substantially throughout the last decade and must be considered as the main driver of competition in the domestic U.S. airline industry.
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