There has been a perception that U.S. trunk airlines had an inherent cost advantage over smaller regional airlines because of economies of scale. We have formulated a general model of airline costs, which we estimate by using panel data on large and small airlines. Differences in scale are shown...

The airline industry is the central part of the commercial aviation value and supply chain. Nevertheless, it has the lowest profit margin and return on investment compared to other sectors in the chain. This leads to the question whether the airline industry is sustainable in the long run, the...