Post-crash airline pricing: A case study of Alaska Airlines Flight 261

- Fares of a crash airline are reduced only right after the crash.
- Passenger traffic decreases immediately after the crash.
- The effects of a plane crash are not prolonged.

This paper examines the impact of the crash of Alaska Airlines Flight 261 on the domestic fares of the crash carrier, using a difference-in-difference approach. The results show that the crash reduced fares of Alaska Airlines relative to those of its competitors only in the months right after the crash, indicating that the financial ramifications are not persistent.