This paper considers the changes to airline networks, service patterns and competition that have taken place as a result of recent airline mergers on both sides of the North Atlantic as well as through trans-atlantic alliances.
Capacity, frequency and the competitive position are studied at London and New York with the use of schedule data in different markets. Measures of market concentration are evaluated. ICAO data is employed to examine load factors on international routes and UK CAA data to consider the distribution of traffic between airports in London.
It is shown that the effectiveness of the hubs has increased and been made more efficient for the surviving airlines, through fewer competitors, an enlarged network and greater control of capacity. Potential concerns are identified however regarding passenger choice, pricing and service options that suggest the industry is moving towards an oligopoly. Smaller cities are also seen to be the losers from consolidation with slot divestments favouring increased service in the dense markets, with many regional links being axed altogether.
The paper supplements the literature on airline consolidation with a particular focus on the two biggest markets in the world - London and New York - which demonstrate some similar but also some different issues. Both airline network impacts and choice and service for local consumers are considered.