Table 5.
Effects of horizontal M&As on the cost structure with respect to the World Airline's Cost Benchmarka,b,c.
| One-Year Loss |
Three-Year Loss |
||||
|---|---|---|---|---|---|
| Variables | Base Model | Loss Model | Profit Model | Loss Model | Profit Model |
| Constant | 947.4 (1252) | 1101 (1415) | 1803 (3244) | 1263 (1680) | 1209 (1728) |
| δ1 - Fixed Cost Variation (million $) | 484.5* (242.2) | 601.3*** (300.7) | −237.7 (418.1) | 209.0 (443.4) | 472.5 (285.8) |
| δ2 -Variable Cost Variation ($ per ASM) | −0.003 (0.002) | −0.005** (0.002) | 0.014** (0.005) | −0.007** (0.002) | 0.003 (0.003) |
| Adjusted R2 | 0.84 | 0.68 | 0.91 | 0.73 | 0.87 |
| n = 206 | n = 151 | n = 55 | n = 78 | n = 128 | |
*p < 0.05, **p < 0.01, ***p < 0.001.
a
Dependent variable = TCi,t - OUi,t * WACi,t.
b
Fixed-effect estimation.
C
Standard errors are eported in parenthesis.