Merger between airlines in financial distress: does the merger save them?

Zhang, Yahua (2015) Merger between airlines in financial distress: does the merger save them? Competition and Regulation in Network Industries, 16 (1). pp. 66-81. ISSN 1783-5917

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Abstract

The merger in 2009 between China Eastern Airlines and Shanghai Airlines came at a time when both airlines were suffering heavy losses, and were struggling for survival during the global financial crisis. An examination of the prices on China Eastern’s seven domestic Shanghai-based routes suggests that on average fares on departure days have increased by 22% in the post-merger period. It appears that the 2009 merger conferred China Eastern with significant market power owing to the parallel nature of this acquisition, thereby resulting in record profit reported in 2010. This reminds regulatory authorities to remain vigilant in handling airline mergers when numerous parallel routes are involved.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Access to Submitted version in accordance with the copyright policy of the publisher.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 12 May 2016 23:40
Last Modified: 21 Dec 2017 03:57
Uncontrolled Keywords: airline merger; market power; Lerner index; China Eastern
Fields of Research : 14 Economics > 1402 Applied Economics > 140217 Transport Economics
Socio-Economic Objective: B Economic Development > 91 Economic Framework > 9102 Microeconomics > 910203 Industrial Organisations
URI: http://eprints.usq.edu.au/id/eprint/28171

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