Merger between airlines in financial distress: does the merger save them?
Article
Article Title | Merger between airlines in financial distress: does the merger save them? |
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ERA Journal ID | 35638 |
Article Category | Article |
Authors | |
Author | Zhang, Yahua |
Journal Title | Competition and Regulation in Network Industries |
Journal Citation | 16 (1), pp. 66-81 |
Number of Pages | 16 |
Year | 2015 |
Place of Publication | Belgium |
ISSN | 1783-5917 |
Web Address (URL) | http://journals.sagepub.com/doi/pdf/10.1177/178359171501600104 |
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. |
Keywords | airline merger; market power; Lerner index; China Eastern |
ANZSRC Field of Research 2020 | 380117. Transport economics |
Public Notes | File reproduced in accordance with the copyright policy of the publisher/author. |
Byline Affiliations | School of Commerce |
Institution of Origin | University of Southern Queensland |
https://research.usq.edu.au/item/q3307/merger-between-airlines-in-financial-distress-does-the-merger-save-them
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