To study the effect of airline alliances on international fares, Brueckner examined more than 50,000 air fares compiled in the fourth quarter of 1999 by the U.S. Department of Transportation's Passenger Origin-Destination Survey. The data included interline trips with thousands of foreign endpoints. The UI economist found that the average round-trip fare was 8 to 17 percent lower among airlines that cooperated in a partnership than those that did not. The exact fares depended on the demand for travel on a specific route. Air alliances reduce fares because carriers can extend their networks without the cost of operating more flights, Brueckner said.
Alliances also encourage coordinated flight schedules and better use of ground personnel.
Prior to the growth of airline alliances, fares among carriers were set by the International Air Transport Association on a distance-based formula.