Airlines competition: Bad for travelers?

Cmpetition is good for consumers, but a new study has shown that when a budget airline enters the market it can have an adverse affect.

Airlines competition: Bad for travelers?

Cmpetition is good for consumers, but a new study has shown that when a budget airline enters the market it can have an adverse affect.

According to Indiana University’s Kelley School of Business, while competition helps to reduce prices it also leads to more late flights, the Los Angeles Times reports.

They looked at the effect of a new low-cost airline entering the US market and found that the rate of late flights jumped by 3.2 percentage points.

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‘As much as more competition means lower prices, it is not as clear that the same is true with quality,’ commented report co-author Jeff Prince, the associate professor of business economics at the school.

Competition concerns delayed the recent merger between American Airlines and US Airways, with the US Justice Department fearing it would lead to a price increase.

The problem was solved by both airlines giving up slots at US airports.

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