Economies of scale in the US airline industry
airline, scale economies, economics, transportation, modeling
This study investigates economies of scale in the US airline industry using annual data, from 1987 to 2009, on the largest airlines. The paper estimates both a translog and Cobb-Douglas model of both an economic and transportation definition of economies of scale. The study shows that the results from models based on the two definitions are remarkably similar except during rapid growth in output and that the largest US airlines operate under modest scale economies.
Johnston, Ahren, and John Ozment. "Economies of scale in the US airline industry." Transportation Research Part E: Logistics and Transportation Review 51 (2013): 95-108.
DOI for the article