Airline capacity utilization increased dramatically between 1993 and
2007, after staying fairly level following deregulation. We argue that
consumers' use of the Internet to investigate and purchase airline
tickets reduces market frictions and allows airlines to meet demand
with less capacity and higher load factors. We find that differences
in the rate of change of metropolitan area Internet penetration are
positively correlated with differences in the rate of change of airlines' airport-pair load factors. Consistent with our explanation, this correlation is greater on flights in more competitive markets and on flights with fewer total passengers.
Dana, James D. Jr., and Eugene Orlov.
"Internet Penetration and Capacity Utilization in the US Airline Industry."
American Economic Journal: Microeconomics,
Production, Pricing, and Market Structure; Size Distribution of Firms
Information and Internet Services; Computer Software