Publisher DOI: 10.1016/j.jairtraman.2021.102100
Title: Commodity price pass-through in the US airline industry and the hidden perks of consolidation
Language: English
Authors: Wolter, Alexander H. 
Ehlers, Thorsten  
Lütjens, Klaus 
Gollnick, Volker 
Keywords: Airline market consolidation; Airline market segmentation; Asymmetric fuel price pass-through; Fuel price pass-through; Jet fuel tax; Pass-through under competitive pressure
Issue Date: Aug-2021
Source: Journal of Air Transport Management 95: 102100 (2021-08)
Abstract (english): 
How do changing jet fuel prices impact airline revenues? As expenses for jet fuel are one of the most relevant cost factors for airlines, their economic success largely depends on the ability to match changes on the cost side with an adaption on the revenue side. While previous studies primarily focused on the impact of fuel price changes to consumer prices, this paper empirically examines the ability of US airlines to pass-through lagged jet fuel prices to scaled operating revenues from an airline driven perspective. Our results suggest that the extent to which an exogenous increase in fuel prices can be passed on to revenues will deviate according to the competitive situation faced by an airline. Based on these findings our research should also be of interest for European policy makers who are discussing actions to exogenously increase jet fuel prices due to environmental reasons.
ISSN: 0969-6997
Journal: Journal of air transport management 
Institute: Lufttransportsysteme M-28 
Document Type: Article
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