The Role of Market Structure in Airline Mergers

We consider the role of market structure in determining airline delays by analysing the effect of market concentration and market share on delays. Models based on these variables give signifcantly different predictions for how mergers affect delays. To determine which model is best, we provide misspecifcation tests. Using US domestic airline delays between 2004 and 2019, we fnd that market sharebased models are misspecifed, whereas market concentration models are not. Under the market concentrationbased models, mergers cause airline delays to increase, with a larger share of the delays occurring on flights offered by the airlines not involved in the mergers.