  In the US airline industry, independent regional airlines fly passengers on
behalf of several national airlines across different markets, giving rise to
$\textit{common subcontracting}$. On the one hand, we find that subcontracting
is associated with lower prices, consistent with the notion that regional
airlines tend to fly passengers at lower costs than major airlines. On the
other hand, we find that $\textit{common}$ subcontracting is associated with
higher prices. These two countervailing effects suggest that the growth of
regional airlines can have anticompetitive implications for the industry.
