The Review of Economics and Statistics Vol. 108 No. 3 2026
Common Subcontracting and Airline Prices
Abstract
In the U.S. airline industry, independent regional airlines fly passengers on behalf of several national airlines across different markets, giving rise to common subcontracting. On the one hand, we find that subcontracting is associated with lower prices, consistent with the notion that regional airlines tend to fly passengers at lower costs than major airlines. On the other hand, we find that common subcontracting is associated with higher prices. These two countervailing effects suggest that the growth of regional airlines can have anticompetitive implications for the industry.
- DOI
- 10.1162/rest_a_01420
- Volume
- 108
- Issue
- 3
- Pages
- 712-726
- Language
- en
- Sources
- openalex crossref