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Frequent flyer programs premium and the role of airport dominance

Author

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  • Diego Escobari

Abstract

This article estimates a Frequent Flyer Programs (FFP) price premium - higher fares associated with a larger proportion of travellers using FFP. The results show that FFP affect the entire price distribution, but the effect is larger on lower end fares. In addition, airport dominance increases the premium on less expensive fares but has no effect on the premium associated with the right tail of the price distribution.

Suggested Citation

  • Diego Escobari, 2011. "Frequent flyer programs premium and the role of airport dominance," Applied Economics Letters, Taylor & Francis Journals, vol. 18(16), pages 1565-1569.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:16:p:1565-1569
    DOI: 10.1080/13504851.2010.548780
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    Cited by:

    1. Luttmann, Alexander & Ladd, Daniel, 2023. "Loyalty rewards and redemption behavior: Stylized facts for the U.S. airline industry," MPRA Paper 119214, University Library of Munich, Germany.
    2. Gaggero, Alberto A. & Luttmann, Alexander, 2023. "The determinants of hidden-city ticketing: Competition, hub-and-spoke networks, and advance-purchase requirements," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 173(C).
    3. Castillo-Manzano, José I. & López-Valpuesta, Lourdes, 2014. "Living “up in the air†: Meeting the frequent flyer passenger," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 48-55.
    4. de Jong, Gerben & Behrens, Christiaan & van Ommeren, Jos, 2019. "Airline loyalty (programs) across borders: A geographic discontinuity approach," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 251-272.
    5. Gao, Yi & Liu, Jiayu, 2026. "Frequent flyer programs in academic studies: A literature review of research progress since 2000," Journal of Air Transport Management, Elsevier, vol. 131(C).
    6. Gaggero, Alberto A. & Luttmann, Alexander, 2025. "Systematic peak-load pricing during holiday periods: Evidence from the U.S. airline industry," Economics of Transportation, Elsevier, vol. 41(C).
    7. Bayuaji Prasetyo & Areo, Adebowale Biodun & Omotayo, Vincent Adewale, 2020. "Board Attributes And Quality Of Financial Reporting In Nigerian Companies: An Empirical Evidence," Malaysian E Commerce Journal (MECJ), Zibeline International Publishing, vol. 4(2), pages 33-38:4, May.

    More about this item

    Keywords

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    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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