The impact on production and costs after the acquisition of an airline by a competitor in Brazil: a Cobb-Douglas function application

Authors

  • José Alexandre Tavares Guerreiro Fregnani Instituto de Tecnológico de Aeronáutica
  • Tarik Hadura Orra Instituto de Tecnológico de Aeronáutica
  • Rogéria de Arantes Gomes Eller Instituto de Tecnológico de Aeronáutica
  • Bento Silva de Mattos Instituto de Tecnológico de Aeronáutica

DOI:

https://doi.org/10.14295/transportes.v27i1.1512

Keywords:

Air transport management, Productivity, Airline operational costs, Cobb-Douglas function, Air transport in Brazil.

Abstract

Objective of this paper is to analyze the impact on production and air transport costs as result of the acquisition of an airline in growth by its dominant competitor with similar operational pattern. Two Cobb-Douglas functions, related to production and costs respectively, were used for such analysis, considering the periods before and after the acquisition. We take as example for analysis the acquisition of Webjet Linhas Aéreas SA by VRG Linhas Aéreas (GOL Linhas Aéreas Inteligentes) officially consolidated in October 2012. The results demonstrate that the acquisition of the market growing company with similar operational pattern provided negative impact on the company's productivity, showing loss of operational efficiency and increased costs, not absorbing in full production potential that the acquisition of the company could bring. Such methodology demonstrated to be effective in the impact analysis of such kind of operations since permits conclusions based on econometric results to be used by decision makers.

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Author Biography

José Alexandre Tavares Guerreiro Fregnani, Instituto de Tecnológico de Aeronáutica

Transporte Aéreo

References

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Published

2019-04-30

How to Cite

Fregnani, J. A. T. G., Orra, T. H., Eller, R. de A. G., & Mattos, B. S. de. (2019). The impact on production and costs after the acquisition of an airline by a competitor in Brazil: a Cobb-Douglas function application. TRANSPORTES, 27(1), 172–183. https://doi.org/10.14295/transportes.v27i1.1512

Issue

Vol. 27 No. 1 (2019)

Section

Artigos

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