Project Description
The 2016 joint venture between Delta Airlines and Aeroméxico Airlines formed one of the largest air transport alliances between US and Latin American airline companies. Nonetheless, this alliance did not account for the largest transport of passengers between the US and Mexico. Despite such evidence indicating this alliance is not the dominant service provide for transport service between these two countries, the US Department of Justice is now considering the elimination of the Delta-Aeroméxico alliance. Proposed research will provide a nuanced empirical analysis of potential anticompetitive behavior of Delta and Aeroméxico by examining which routes these two companies serve and whether these companies are the dominant providers on these routes. We will also examine how many slots the two companies own for the routes they serve. Making this observation is critical to understanding their capability to charge noncompetitive fares to passengers. Data on average fare prices are not readily available for international transport services. However, we will be able to compute average yields on a route since information on revenue and number of passengers is listed by the Bureau of Transportation Statistics. So, we will be able to compare average prices on routes served by the alliance.
Tasks and Responsibilites
Students will collect data from the Bureau of Transportation Statistics (BTS) to test whether the Delta -Aeroméxico alliance provides these companies with monopoly power along US-Mexico routes. Students will use this data to estimate yield equations and compare those yields with yield of the major competitors. Students will learn how to use a high-powered statistical package (Stata and maybe R) so they can estimate the yield equation. Such knowledge is in high demand in the job market as the need for individuals with data analyst experience is quite high. Students will also compose a research paper and present their work at a poster a UWM conference.
Desired Qualifications
None listed.