Effects of Southwest Airlines on Carrier Profits and Entry Probabilities

Table 3

Model results of competitive effects.

	(I)	(II)
Competitive effect
SW nonstop on non-SW nonstop	[–25.48, –21.19]
SW nonstop on non-SW connect	[–16.73, –12.79]
SW connect on non-SW nonstop	[–2.63, –0.02]
SW connect on non-SW connect	[–7.67, –5.01]
SW nonstop on FSC nonstop		[–18.13, –13.95]
FSCs: AA, DL, and UA
SW nonstop on JetBlue nonstop		[–23.25, –19.20]
SW nonstop on small LCC nonstop		[–26.98, –23.18]
SW nonstop on FSC connect		[–13.26, –10.02]
SW nonstop on JetBlue connect		[–17.05, –13.13]
SW nonstop on small LCC connect		[–18.98, –14.74]
SW connect on FSC nonstop		[–1.03, 0.91]
SW connect on JetBlue nonstop		[–2.14, –0.47]
SW connect on small LCC nonstop		[–2.57, –1.30]
SW connect on FSC connect		[–4.89, –3.91]
SW connect on JetBlue connect		[–7.47, –5.03]
SW connect on small LCC connect		[–6.82, –4.95]
Excess distance	[–0.25, –0.03]	[–0.81, –0.41]
Airport presence	[0.18, 0.22]	[0.35, 0.47]
Per capita income	[2.47, 2.91]	[5.44, 5.89]
Income growth rate	[0.52, 0.72]	[0.63, 1.17]
Slot control	[–2.69, –2.44]	[–3.24, –2.13]
Market size	[5.11, 5.89]	[6.98, 8.86]
Market distance	[–1.77, 0.89]	[1.02, 2.05]
Closest airport	[–1.04, 0.44]	[–2.68, –1.99]
Constant	[–10.60, –8.14]	[–8.60, –6.15]

Note. The intervals reported in this table can be interpreted as the 95% confidence region. “SW” represents Southwest. “Non-SW” represents non-Southwest carriers. “FSC” refers to major full-service carriers, including American, Delta, and United. “Small LCC” refers to small low-cost carriers, including Spirit, Frontier, Allegiant, and Virgin. The simulation is performed by setting and .