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.