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We analyze how schedule times, actual flight times and on-time performance have changed in the U.S. airline industry between 1990 and 2016. We find schedule times have increased in most years, with the largest increases after 2008. Actual flight times and total travel times have also increased but by less than schedule times and the gap has grown over time. This has resulted in reduced arrival delays even though flights are, in fact, taking longer to complete. We discuss the implications of these findings for quality provision and information disclosure within the airline industry. [ABSTRACT FROM AUTHOR]

This article investigates the relationship between transaction characteristics and contractual form as well as the role of technology adoption as a driver of variation in transaction characteristics. Our setting is the US airline industry, where many large airlines have outsourcing relationships with smaller regional carriers. In the late 1990s, fixed price contracts began to replace revenue sharing agreements as the dominant contractual form in these relationships. Moreover, this change coincided with the diffusion and adoption of a new aircraft technology, the regional jet. We present evidence that the new aircraft technology changed the set of flights that airlines subcontracted to their regional partners and did so in a way that favored the use of fixed price rather than revenue-sharing contracts. In particular, our results are consistent with the hypothesis that the new flights being subcontracted had characteristics that would have led to significant haggling costs under route-level revenue sharing. (JEL L14, D86, L22) [ABSTRACT FROM PUBLISHER]

We investigate the effects of vertical integration on operational performance. Large U.S. airlines use regional partners to operate some of their flights. Regionals may be owned or governed through contracts. We estimate whether an airline's use of an owned, rather than independent, regional at an airport affects delays and cancellations on the airline's own flights out of that airport. We find that integrated airlines perform systematically better than nonintegrated airlines at the same airport on the same day. Furthermore, the performance advantage increases on days with adverse weather and when airports are more congested. These findings suggest that, in this setting, vertical integration may facilitate real-time adaptation decisions. [ABSTRACT FROM AUTHOR]

Customer complaints measure consumers' dissatisfaction with the quality of a product or service. If product quality is unobservable ex ante, customer complaints may be driven by expectations as well as by the actually experienced quality level. I test whether the level of quality that could be expected prior to consumption affects the number of customer complaints after controlling for– ex post observable–actual quality, using data from the U.S. airline industry. I find that there are fewer complaints when actual quality is higher. Controlling for actual quality, a higher level of expected quality leads to more complaints. [ABSTRACT FROM AUTHOR]