Highlights We document and analyse events that followed bankruptcy of a network carrier. We evaluate whether passengers are better-off following this change. We develop a methodological approach to evaluate price-frequency trade-off post-bankruptcy. On some markets passengers are insufficiently compensated for lower frequency via lower fares.
Abstract We document and analyze events that followed bankruptcy of Malév Hungarian Airlines on February 3, 2012. Most of the new services post-bankruptcy came from low-cost point-to-point carriers. Flight frequency offered by such carriers is lower than what was offered by the network airline. Yet, fares charged by these airlines are presumably also lower. We suggest a methodological approach to analyze the corresponding trade-off, and apply it to our data. We conclude that passengers flying to seven out of eighteen former Malév destinations where point-to-point carriers entered might be worse off despite potentially paying lower prices.
Estimating the consumer welfare effects of de-hubbing: The case of Malév Hungarian Airlines
2014-03-07
15 pages
Article (Journal)
Electronic Resource
English
Estimating the consumer welfare effects of de-hubbing: The case of Malév Hungarian Airlines
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