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Price dispersion and competition in European airline markets

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  • Obermeyer, Andy
  • Evangelinos, Christos
  • Püschel, Ronny

Abstract

This paper tests the effects of competition on price dispersion in European airline markets. By conducting a cross-sectional analysis of some 1200 flights between more than 130 European airport pairs, we confirm recent results for the US airline industry that show a non-monotonic relationship between competition intensity and price dispersion. We link our results to recent efficiency and productivity analyses. Our findings support the hypothesis that efficient airlines are better positioned to differentiate fares than their less efficient counterparts.

Suggested Citation

  • Obermeyer, Andy & Evangelinos, Christos & Püschel, Ronny, 2013. "Price dispersion and competition in European airline markets," Journal of Air Transport Management, Elsevier, vol. 26(C), pages 31-34.
    • Handle: RePEc:eee:jaitra:v:26:y:2013:i:c:p:31-34
    DOI: 10.1016/j.jairtraman.2012.08.014
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    References listed on IDEAS

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    Cited by:

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    5. Tomasz Stanisław Szopiński & Robert Nowacki, 2014. "Plane Ticket Price Dispersion in the Online Selling System in Poland," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 8(2), June.
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    8. Roma, Paolo & Zambuto, Fabio & Perrone, Giovanni, 2014. "Price dispersion, competition, and the role of online travel agents: Evidence from business routes in the Italian airline market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 146-159.
    9. Masood Kiarashrad & Seyed Hamid Reza Pasandideh & Mohammad Mohammadi, 2021. "Identifying and prioritizing the essential factors on ticket pricing strategy in a local market based on empirical study: Iranian domestic market," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(1), pages 76-87, February.
    10. Andrés Martínez, María-Encarnación & Alfaro Navarro, José-Luis & Trinquecoste, Jean-François, 2017. "The effect of destination type and travel period on the behavior of the price of airline tickets," Research in Transportation Economics, Elsevier, vol. 62(C), pages 37-43.
    11. Ko, Young Dae, 2016. "An airline's management strategies in a competitive air transport market," Journal of Air Transport Management, Elsevier, vol. 50(C), pages 53-61.
    12. Alderighi, Marco & Gaggero, Alberto A. & Piga, Claudio A., 2022. "Hidden prices with fixed inventory: Evidence from the airline industry," Transportation Research Part B: Methodological, Elsevier, vol. 157(C), pages 42-61.
    13. Evangelinos, Christos, 2013. "Interessengruppen und Preissetzung im Verkehr," Discussion Papers 2/2013, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.
    14. Howell, Charles & Grifell-Tatjé, Emili, 2022. "Market heterogeneity and the relationship between competition and price dispersion: Evidence from the U.S. airline market," Transport Policy, Elsevier, vol. 125(C), pages 218-230.
    15. Goutam Dutta & Sumitro Santra, 2016. "An exploratory study of price movements along booking profiles in the airline industry in the Indian domestic market," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 9(1), pages 72-88.
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    19. Cattaneo, Mattia & Malighetti, Paolo & Redondi, Renato & Salanti, Andrea, 2018. "Changes in frequencies and price variations on point-to-point routes: The case of easyJet," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 60-70.
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    21. Dutta, Goutam & Santra, Sumitro, 2015. "Price Movements of the Competing Airlines in the Indian Market: An Empirical Study (A)," IIMA Working Papers WP2015-01-02, Indian Institute of Management Ahmedabad, Research and Publication Department.
    22. Goutam Dutta & Sumitro Santra, 2017. "An empirical study of price movements in the airline industry in the Indian market with power divergence statistics," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(2), pages 218-232, April.
    23. Tomasz Stanisław Szopiński & Robert Nowacki, 2015. "The Influence of Purchase Date and Flight Duration over the Dispersion of Airline Ticket Prices," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 9(3), September.

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