The effect of strategic alliances on service quality: Evidence from airline codeshare agreements and on-time performance

This research looks for a casual effect of strategic alliances on service quality while taking into account other factors such as market structure and firm sizes. We derive data from the US Department of Transportation (DOT) and restrict our research sample to only U.S. domestic flights. Because we consider the effect of codeshare agreements between all major airlines, in combination with the limitation of the on time performance dataset, we are forced to make use of a new and unique method for estimating the effect of strategic alliances on service quality. In this new method, we compare codeshared routes by non-codeshared routes by using a dummy variable that values one if more than 5% of all flights on a particular route for a specific quarter are defined as codeshared flights. The main finding of this thesis is that airlines operating on codeshared routes experience on average fewer and less long delays than on non-codeshared routes. This effect is stronger on more competitive routes.