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Is low-cost carriers’ revenue management a firm capability?

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  • Alderighi, Marco
  • Nicolini, Marcella
  • Piga, Claudio A.

Abstract

We review the importance of the revenue management (RM) system in the airline industry, focusing on cost-leader companies. We show that RM of low-cost carriers, which looks simple at a first glance, is indeed quite a sophisticated tool for extracting value from different demand segments, and thus, it is, for all intents and purposes, a capability in the resource-based view.

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  • 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.
    • Handle: RePEc:eee:jaitra:v:78:y:2019:i:c:p:15-22
    DOI: 10.1016/j.jairtraman.2019.04.002
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    Cited by:

    1. 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.
    2. Li Cheng & Liu Conglin, 2023. "Game analysis and pricing strategy of duopoly airlines based on service," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 14(3), pages 1103-1124, June.
    3. An, Jaehyung & Mikhaylov, Alexey & Jung, Sang-Uk, 2021. "A Linear Programming approach for robust network revenue management in the airline industry," Journal of Air Transport Management, Elsevier, vol. 91(C).
    4. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2023. "Price discrimination through hidden city options? A data-driven study on the extent and evolution of skiplaggability in the global aviation system," Journal of Air Transport Management, Elsevier, vol. 108(C).
    5. Dominik Punda & Malgorzata Jasiulewicz-Kaczmarek & Jacek Dziwulski, 2021. "Economization Methods Used by Low-Cost Airlines – An Overview," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 301-310.

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    More about this item

    Keywords

    D22; L11; L93; Revenue management; Dynamic pricing; Unsegmented pricing; Airline industry;
    All these keywords.

    JEL classification:

    • 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

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