CEU Electronic Theses and Dissertations, 2025
| Author | Essing, Carsen |
|---|---|
| Title | Low-Cost, High-Impact: A DiD Analysis of Avelo and Breeze`s Disruption in the U.S. Domestic Air Travel Market |
| Summary | This thesis examines the pricing impact of Avelo Airlines and Breeze Airways, two hybrid lowcost carriers that launched in 2021, on domestic airfares in the United States. Using a differencein-differences approach with two-way fixed effects and matched route-level data, I find that their entry led to an average fare reduction of approximately 19% on affected routes. These effects appeared immediately and were not preceded by anticipatory fare changes, suggesting that incumbents did not view the new entrants as credible threats. In many cases, legacy carriers exited rather than competed, leaving Avelo or Breeze as the sole provider. These findings highlight the pricing influence of small-scale entrants and suggest the need for policy attention to infrastructure access and route-level market dynamics. |
| Supervisor | Koster, Mats |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2025/essing_carsen.pdf |
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