How do global airline alliances affect flight frequency? Evidence from Russia

Abstract

This paper analyzes the effects on flight frequency of two alliances that came about in the Russian airline market in recent years: between Aeroflot and SkyTeam in 2006, and between S7 and oneworld in 2010. We use a difference-in-differences (DID) model to identify the effects of these alliances on flight frequencies. The integration of S7 into oneworld provides evidence that the alliance resulted in reduced flight frequencies on routes where S7 overlapped with its new partners, but that it resulted in increased frequencies on routes where there was no overlap, especially in the case of so-called thin routes. Regarding the integration of Aeroflot into SkyTeam, we find that the alliance led to increased flight frequencies on routes where Aeroflot and its new partners had previously been competing. The fact that Aeroflot is a state-owned airline with a strong position in the Russian market might explain this expansion after the alliance. We also find that the alliance increased the frequencies on thin routes where there was no overlap.