Honors Theses and Capstones

Date of Award

Spring 2020

Project Type

Senior Honors Thesis

College or School




Program or Major

Analytical Economics

Degree Name

Bachelor of Science

First Advisor

Aziz Saglam


This paper expands on the research of competition within the airline industry. This analysis estimates the fare-impact of new full-service or low-cost competition in city-pair markets in the domestic United States. Given the comprehensive restructuring of the airline industry as a result of the Delta-Northwest, United-Continental, and American-US Airways mergers, this analysis examines how the fare-impact of competition may have changed since the pre-merger era. This paper suggests evidence of a weaker effect regarding the entry of a low-cost carrier and a stronger effect regarding the entry of a legacy carrier in the post-merger era relative to the pre-merger period. The results support the hypothesis of convergence between the two business models.