Coles, H.E. (2003) The competitive effects of mergers across hub-and-spoke networks, CCR Working Paper CCR 03-3, School of Economics and Social Studies, University of East Anglia, Norwich, NR4 7TJ, United Kingdom

This paper examines the effect of mergers across airline hub-and-spoke networks, on traffic levels, consumer surplus and the profit of competing airlines. Previous research has concentrated on the benefits such mergers provide for interline passengers and typically show that consumer welfare rises. This paper illustrates how tractable changes in the level and nature of competition can reverse the welfare implications even when interline passengers benefit. The model fits the proposed BA/AA alliance and provides some interesting insight into the European and US Competition Commission's findings, and the likely consumer welfare implications of this proposed "virtual merger".

The paper of Burghouwt & Veldhuis (2005) in the file "multi-hub development" on market concentration effects of the Air France-KLM mergers points in the samen direction.