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Has Ryanair's pricing strategy changed over time? An empirical analysis of its 2006–2007 flights

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  • Malighetti, Paolo
  • Paleari, Stefano
  • Redondi, Renato

Abstract

This paper analyzes the question of whether Ryanair's pricing strategies have changed over time. We create a panel dataset of fares for all of Ryanair's European flights over a two-year period, from 1 January 2006 to 31 December 2007. We calculate the average fare over a 90-day period prior to departure and the intensity of dynamic pricing for each flight in the panel, in particular analysing the changes in these variables observed between pairs of “equivalent” flights. Our results show that overall, both average fares and the intensity of dynamic pricing decreased in 2007. More than one-third of flights saw a price reduction of more than 10%. Now that it has become the dominant low-cost carrier in Europe, Ryanair appears to be softening its dynamic pricing activities on existing routes, typically employed to stimulate additional touristic demand. Thus, booking in advance becomes relatively more expensive.

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  • Malighetti, Paolo & Paleari, Stefano & Redondi, Renato, 2010. "Has Ryanair's pricing strategy changed over time? An empirical analysis of its 2006–2007 flights," Tourism Management, Elsevier, vol. 31(1), pages 36-44.
    • Handle: RePEc:eee:touman:v:31:y:2010:i:1:p:36-44
    DOI: 10.1016/j.tourman.2009.02.007
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    4. 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.
    5. Salanti, Andrea & Malighetti, Paolo & Redondi, Renato, 2012. "Low-cost pricing strategies in leisure markets," Tourism Management, Elsevier, vol. 33(2), pages 249-256.
    6. Cattaneo, Mattia & Malighetti, Paolo & Morlotti, Chiara & Redondi, Renato, 2016. "Quantity price discrimination in the air transport industry: The easyJet case," Journal of Air Transport Management, Elsevier, vol. 54(C), pages 1-8.
    7. Malighetti, Paolo & Redondi, Renato & Salanti, Andrea, 2014. "Competitive vs. monopolistic routes: Are fares so different?," Research in Transportation Economics, Elsevier, vol. 45(C), pages 3-8.
    8. Alderighi, Marco & Nicolini, Marcella & Piga, Claudio A., 2019. "Is low-cost carriers’ revenue management a firm capability?," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 15-22.
    9. Moreno-Izquierdo, Luis & Egorova, Galina & Peretó-Rovira, Alexandre & Más-Ferrando , Adrián, 2018. "Exploring the use of artificial intelligence in price maximisation in the tourism sector: its application in the case of Airbnb in the Valencian Community," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 42, pages 113-128.
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