Comparison of Air Fares and Services at St. Louis Before and After Trans World Airlines Acquired Ozark Airlines

摘要

The study analyzes air fares and service levels in the St. Louis markets before and after the acquisition of Ozark Airlines by Trans World Airlines (TWA) in 1986. The study also includes an examination of possible barriers to entry at St. Louis. It begins by reviewing an earlier study of the issue by the General Accounting Office and noting some analytical limitations of its approach. It then compares TWA's average fares for the first half of 1985 with those for the first half of 1988, concluding that there is no evidence to suggest that the acquisition had a significant impact on TWA's fare structure. It provides information on service at St. Louis, noting that air travelers at St. Louis have not seen a significant change in nonstop city pairs served by TWA since the acquisition, and that opportunities exist for other carriers to establish competitive service from St. Louis. The last section examines whether there are physical, operational, or legal impediments to entry at Lambert-St. Louis International Airport, concluding that the only constraint on even large-scale entry is the construction time for additional gates or ancillary facilities.