The effects of International Airline’s Groups acquisition of Aer Lingus on the Irish air transportation market

Abstract

In this study, I employ a Differences-in-Differences methodology to estimate the impact of the International Airlines Group’s (IAG) acquisition of Aer Lingus, Ireland’s former national airline, on flight frequency across various routes. By controlling for multiple route-level characteristics and competition factors. I show that there was a significant increase in annual flight frequencies departing Irish airports after the acquisition while there is also no evidence of anti-competitive effects on routes in which IAG and Aer Lingus competed prior to the acquisition. There is also evidence of a shift in flight frequency from Shannon to Dublin Airport. These findings support the European Commissions decision to approve IAG’s acquisition of Aer Lingus and shows the acquisition was beneficial for the Irish air transportation market as a whole.