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Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/4629

Title: Mergers and business model assimilation: evidence from low-cost airline takeovers
Authors: Dobson, Paul
Piga, Claudio
Keywords: Merger
Business model
Low-cost airline
Price discrimination
Yield management
Issue Date: 2009
Publisher: © Loughborough University
Series/Report no.: Loughborough University. Department of Economics. Discussion Paper Series;WP 2009-02
Abstract: This paper examines mergers that lead to an almost immediate replacement of the target firm’s business model in favor of that of the acquiring firm. We examine the post-merger behavior of the two leading European dedicated low-cost airlines, EasyJet and Ryanair, each acquiring another low-cost airline, respectively Go Fly and Buzz. We find that both takeovers had an immediate and sustained impact on both the pricing structures and the extent of inter-temporal price schedules used on the acquired routes, with early booking fares noticeably reduced and only very late booking fares increased. The analysis suggests that the takeovers had a net beneficial effect as a consequence of the introduction of the acquiring firms’ business models and associated yield management pricing systems.
Description: This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2009_2.html
Version: Published
URI: https://dspace.lboro.ac.uk/2134/4629
ISSN: 1750-4171
Appears in Collections:Working Papers (Economics)

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