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Pricing, Competition and Policy in Australasian Air Travel Markets


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  • Tim Hazledine
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    The paper investigates competition between the two incumbent legacy carriers on the New Zealand and Tasman routes, and the extent to which their pricing is constrained by new entry from a low cost carrier and a Fifth Freedom carrier. Price and other data on 1,001 flights on nineteen routes observed in 2004 and 2005 are analysed. The main findings of the paper are: (i) that routes on which Qantas competed with Air New Zealand (Air NZ) tended to have air fares around 20 per cent lower than routes served only by Air NZ; (ii) the entrants Emirates and Pacific Blue offered much lower fares across the Tasman, but yet could not achieve substantial market shares, implying that; (iii) these airlines do not offer much competitive constraint on the pricing of the legacy carriers. © 2010 LSE and the University of Bath

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    Article provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy (JTEP).

    Volume (Year): 44 (2010)
    Issue (Month): 1 (January)
    Pages: 37-58

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    Handle: RePEc:tpe:jtecpo:v:44:y:2010:i:1:p:37-58

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    Cited by:
    1. Hazledine, Tim, 2011. "Legacy carriers fight back: Pricing and product differentiation in modern airline marketing," Journal of Air Transport Management, Elsevier, vol. 17(2), pages 130-135.
    2. Hazledine, Tim, 2010. "Oligopoly price discrimination with many prices," Economics Letters, Elsevier, vol. 109(3), pages 150-153, December.


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