The Impact of Airline Mergers on Environmental Externalities

Abstract

The U.S. airline industry has experienced consolidation in the last decade. At the same time, global environmental concerns have continued to grow. This paper examines the impact of three recent airline mergers on the environment by comparing per-departure NOx emission and the total NOx emission from merging firms at a given airport versus those emitted by non-merging firms at the same airport, by focusing on emissions from airplane flight landing/take-off cycles. The regression results suggest that mergers overall have no impact on either per-departure NOx emissions or total NOx emissions, while some individual mergers resulted in decreased emissions. However, this study finds that mergers have a negative impact on NOx emissions in the medium term when flight destinations are hub airports and a positive impact on NOX emissions in the medium term when flight destinations are non-hub airports.

Yongjoon Park

Assistant Professor of Resource Economics Department

My research interests are IO and Environmental Economics.