Fondazione GRINS
Growing Resilient,
Inclusive and Sustainable
Galleria Ugo Bassi 1, 40121, Bologna, IT
C.F/P.IVA 91451720378
Finanziato dal Piano Nazionale di Ripresa e Resilienza (PNRR), Missione 4 (Infrastruttura e ricerca), Componente 2 (Dalla Ricerca all’Impresa), Investimento 1.3 (Partnership Estese), Tematica 9 (Sostenibilità economica e finanziaria di sistemi e territori).
Open Access
GRINS THEMATIC AREAS
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This article investigates the short-term impact of the Alitalia–ITA Airways transition on pricing strategies and market competition in the Italian domestic air transport sector. Using a novel dataset simulating over 21,000 ticket purchases before and after ITA’s market entry, we apply a difference-in-difference approach combined with propensity score matching to estimate the causal effect of this ownership transition. Our results show a significant fare reduction of approximately 25% on affected routes, driven by ITA’s more competitive pricing and reduced intertemporal price dispersion. The study also documents heterogeneous reactions among competing airlines, particularly Ryanair. These findings provide new empirical evidence on how structural changes in flag carrier ownership affect market dynamics, raising important considerations for competition policy and future regulatory design.
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AKNOWLEDGEMENTS
This study was funded by the European Union - NextGenerationEU, in the framework of the GRINS - Growing Resilient, INclusive and Sustainable project (GRINS PE00000018). The views and opinions expressed are solely those of the authors and do not necessarily reflect those of the European Union, nor can the European Union be held responsible for them.
We would like to thank professors Mike Waterson, Albert Veenstra and participants at the XXV Conference of the Italian Association of Transport Economics and Logistics (SIET), participants of EARIE 2023 conference in Rome and participants at the SOAR meeting 2023 in Toulouse for their valuable comments and suggestions. The usual disclaimer applies. Angela S. Bergantino and Mario Intini acknowledge that this study was funded by the European Union – NextGenerationEU, Mission 4, Component 2, in the framework of the GRINS – Growing Resilient, Inclusive and Sustainable project (GRINS PE00000018 – CUP H93C22000650001). The views and opinions expressed are solely those of the authors and do not necessarily reflect those of the European Union, nor can the European Union be held responsible for them. Ada Spiru acknowledges that this study was carried out within the PON “Ricerca e Innovazione” 2014–2020 “Istruzione e ricerca per il recupero – REACT-EU”, CUP DM 10/08/2021 N.1062 MISURA INNOVAZIONE H95F21001210006; CODICE CUP DM 25/06/2021 N.737 H95F21001470001.
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