Publication Date

5-2024

Advisor(s) - Committee Chair

Jun Yan, Margaret Gripshover, Pat Kambesis

Degree Program

Department of Earth, Environmental, and Atmospheric Sciences

Degree Type

Master of Science

Abstract

We have experienced rapid globalization, facilitated by advancements in technology, long-distance transportation, and efficient telecommunication systems. As urban systems evolve across regional, national, and global scales, driven by economic and transportation activities, air transport becomes the preferred mode for long-distance travel. An airline’s commercial activities can significantly impact the entire airline industry and even a country’s economy. Mergers and bankruptcy of airlines have become common phenomena and strategy maneuvers within the airline industry, affecting the entire airline markets.

In this thesis, an analysis on U.S. domestic airline travel data spanning from 2014 to 2018 was conducted. The findings indicate that the American Airlines- US Airways merger in 2013 was successful in the short term for American Airlines. American Airlines was able to offer more flexible flight options, serve larger passenger volumes, and cover more geographic routes, particularly in second-tier markets. Positive effects were observed in the market shares of the new American Airlines following the merger. The new American Airlines maintained its shares in major markets while experiencing fluctuations in others. The merger had varying impacts on other airlines. Southwest Airlines, emerging as the primary competitor for the new American Airlines in most major markets, was negatively impacted and faced substantial decreases in market shares in many populated cities post-merger, particularly in markets where it competed directly with American Airlines. Meanwhile, Delta and United Airlines saw minimal changes, and even slight increases were observed, in their market shares, primarily due to their focus on serving different markets than those of American Airlines.

Overall, the merger accelerated the domination and even monopolization of some large and medium-sized cities' air travel markets, intensifying competition for market share, especially between the new American Airlines and Southwest, and leading to increased hub domination overall by the new American Airlines. Lastly, this thesis focuses on the short-term impacts of this merger. Unfortunately, a comprehensive understanding of the merger's long-term effects is difficult due to the overall disruption caused by the pandemic.

Disciplines

Economics | Geography | Transportation

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Available for download on Friday, April 16, 2027

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