The effect of vertical product differentiation on fare and market share: Evidence from Delta Air Lines’ middle seat policy

Max J. Hyman, Ian Savage*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

Delta Air Lines engaged in vertical product differentiation during the COVID-19 pandemic. To ensure that passengers did not sit next to a stranger, Delta did not sell the middle seat on its flights that had them. Its principal rivals, American Airlines and United Airlines, sold all seats. Analysis of the non-stop routes on which Delta faced head-to-head competition with American or United reveals that Delta was able to charge a 10% fare premium and increase its relative market share by 4.7 percentage points from its middle seat policy.

Original languageEnglish (US)
Article number100274
JournalEconomics of Transportation
Volume31
DOIs
StatePublished - Sep 2022

Keywords

  • Aviation
  • Pandemic
  • Vertical product differentiation

ASJC Scopus subject areas

  • Transportation
  • Economics, Econometrics and Finance (miscellaneous)

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