Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline
AbstractBased on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-driven theories predict, it emerges that fares monotonically and substantially increase with the flights occupancy rate. Moreover, as suggested in the literature on intertemporal price discrimination, the adoption of advance purchase discounts is widespread as the departure date nears, but it may be part of a U-shaped temporal profile, where discounts are preceded by periods of relatively higher fares. Finally, the intervention of yield management analysts appears to play a substantial role.
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Bibliographic InfoPaper provided by University of Pavia, Department of Economics and Quantitative Methods in its series Quaderni di Dipartimento with number 171.
Length: 43 pages
Date of creation: May 2012
Date of revision:
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Postal: Via S. Felice, 5 - 27100 Pavia
Web page: http://dipartimenti.unipv.eu/on-dip/epmq/Home.html
More information through EDIRC
Pricing policy; Panel Data; Ryanair; Yield Management.;
Other versions of this item:
- Marco Alderighi & Marcella Nicolini & Claudio A. Piga, 2012. "Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline," Working Papers 2012.14, Fondazione Eni Enrico Mattei.
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-15 (All new papers)
- NEP-COM-2012-05-15 (Industrial Competition)
- NEP-TRE-2012-05-15 (Transport Economics)
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