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| Author: | Borenstein, S. Rose, N. L. |
| Title: | The Impact of Bankruptcy on Airline Service Levels |
| Journal: | American Economic Review
2003 : MAY, VOL. 93:2, p. 415-419 |
| Index terms: | BANKRUPTCY AIR TRANSPORT AIRCRAFT INDUSTRY AIRPORTS |
| Language: | eng |
| Abstract: | Authors focus on airline Chapter 11 bankruptcy filings, an extreme measure of financial distress. They use data from 1984 through 2001 to evaluate the impact of major bankruptcies on the level of flights and destinations served at U.S. airports. The results suggest that bankruptcy induces modest declines in service levels, particularly at midsize airports. Authors suggest that the flight reduction associated with bankruptcy may cause a movement toward the socially optimal level of service. Our work takes a first step toward resolving this issue, by determining the magnitude of bankruptcy effects on aggregate air service. The results suggest the need for further research to assess its possible welfare implications. |
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