DP12485 Network Structure and Consolidation in the U.S. Airline Industry, 1990-2015

Author(s): Federico Ciliberto, Emily Cook, Jonathan Williams
Publication Date: December 2017
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12485

We study the effect of consolidation on airline network connectivity using three measures of centrality from graph theory: Degree, Closeness, and Betweenness. Changes in these measures from 1990 to 2015 imply: i) the average airport services a greater proportion of possible routes, ii) the average origin airport is fewer stops away from any given destination, and iii) the average hub is less often along the shortest route between two other airports. Yet, we find the trend toward greater connectivity in the national network structure is largely una ffected by consolidation, in the form of mergers and codeshare agreements, during this period.