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Chapter 5 Distribution of Airline Tickets: A Tale of Two Market Structures

In: Pricing Behavior and Non-Price Characteristics in the Airline Industry

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  • Volodymyr Bilotkach
  • Marija Pejcinovska

Abstract

The vertical relationships literature has considered situations where both producers and retailers have a degree of market power. On one hand, retailers may have certain freedom in deciding what price to charge to the final consumers. On the other hand, large retailers may also pressurize producers (Wal-Mart is a classic example; see alsoComanor and Rey (2000)for a formal treatment of this topic). At the same time, producers may pressurize retailers via resale price maintenance. The interplay of producers' and retailers' bargaining power, in addition to the structure (both horizontal and vertical) of product and distribution markets, eventually determine the sticker price faced by an unsuspecting consumer.

Suggested Citation

  • Volodymyr Bilotkach & Marija Pejcinovska, 2012. "Chapter 5 Distribution of Airline Tickets: A Tale of Two Market Structures," Advances in Airline Economics, in: Pricing Behavior and Non-Price Characteristics in the Airline Industry, pages 107-138, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:aiaezz:s2212-1609(2011)0000003007
    DOI: 10.1108/S2212-1609(2011)0000003007
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    Cited by:

    1. Mumbower, Stacey & Garrow, Laurie A. & Newman, Jeffrey P., 2015. "Investigating airline customers’ premium coach seat purchases and implications for optimal pricing strategies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 53-69.
    2. Tillmann, Andreas M. & Joormann, Imke & Ammann, Sabrina C.L., 2023. "Reproducible air passenger demand estimation," Journal of Air Transport Management, Elsevier, vol. 112(C).
    3. 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.

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