Southwest Airlines and competition in the airline industry /
This paper investigates the competition between major airlines with hub-and -spoke network systems and Southwest Airlines. We provide the first estimates of the determinants of entry decisions and the successful acquisition of market share of an upstart firm like Southwest Airlines. Using Heckman&#...
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| Format: | Thesis Book |
| Language: | English |
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[Place of publication not identified] :
[publisher not identified] ;
2002.
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| Subjects: | |
| Online Access: | http://proxy.library.tamu.edu/login?url=http://proquest.umi.com/pqdweb?did=764774541&sid=1&Fmt=2&clientId=2945&RQT=309&VName=PQD |
| Summary: | This paper investigates the competition between major airlines with hub-and -spoke network systems and Southwest Airlines. We provide the first estimates of the determinants of entry decisions and the successful acquisition of market share of an upstart firm like Southwest Airlines. Using Heckman's sample selection model, we find that product quality is key to explaining Southwest's success. In particular, when Southwest can provide direct or more direct service, it is more likely to enter the market and to successfully gain a large share. Southwest entry causes price reductions for major firms with the largest effects occurring for the highest value customers of large firms. The estimation results, however, suggest that Southwest Airlines intentionally avoids entering markets where destination airports have highly concentrated airport structure or congested facilities. |
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| Item Description: | Vita. "Major Subject: Economics". |
| Physical Description: | ix, 88 leaves : illustrations ; 28 cm. Issued also on microfiche from University Microfilm Inc. |
| Bibliography: | Includes bibliographical references (leaves 67-88). |