IDEAS home Printed from https://ideas.repec.org/a/wly/transj/v50y2011i3p232-250.html

Airline Pricing Strategies Versus Consumer Rights

Author

Listed:
  • Gregor Bischoff
  • Sven Maertens
  • Wolfgang Grimme

Abstract

As airlines price‐discriminate, business travelers usually have to pay prices above average cost for flexible tickets. This allows the airlines to offer cheaper tickets to leisure travelers, albeit in the form of restrictive fares. Methods used by business travelers to circumvent strict rules of discounted fares are known as “cross‐” and “hidden‐city” ticketing. However, according to IATA Recommended Practice 1724, Article 3.3.1, airlines reserve the right to cancel all remaining legs of a booking if flight coupons are not used in full and sequential order. We discuss this issue from both a legal and commercial perspective. After providing an overview of various legal opinions, we predict the impact on airline marketing and economics if the described forms of fare rule circumvention are allowed.

Suggested Citation

  • Gregor Bischoff & Sven Maertens & Wolfgang Grimme, 2011. "Airline Pricing Strategies Versus Consumer Rights," Transportation Journal, John Wiley & Sons, vol. 50(3), pages 232-250, July.
    • Handle: RePEc:wly:transj:v:50:y:2011:i:3:p:232-250
    DOI: 10.5325/transportationj.50.3.0232
    as

    Download full text from publisher

    File URL: https://doi.org/10.5325/transportationj.50.3.0232
    Download Restriction: no
    File URL: https://libkey.io/10.5325/transportationj.50.3.0232?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hess, Stephane, 2008. "Treatment of reference alternatives in stated choice surveys for air travel choice behaviour," Journal of Air Transport Management, Elsevier, vol. 14(5), pages 275-279.
    2. Brons, Martijn & Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2002. "Price elasticities of demand for passenger air travel: a meta-analysis," Journal of Air Transport Management, Elsevier, vol. 8(3), pages 165-175.
    3. Dresner, Martin, 2006. "Leisure versus business passengers: Similarities, differences, and implications," Journal of Air Transport Management, Elsevier, vol. 12(1), pages 28-32.
    4. Tretheway, Michael W, 2004. "Distortions of airline revenues: why the network airline business model is broken," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 3-14.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Spence, Tyler B. & Choi, Youngran, 2025. "Unpacking the digital divide: Heterogeneous effects of open sky agreements on air transport network centrality amid internet regulation constraints," Transport Policy, Elsevier, vol. 168(C), pages 207-219.
    2. Angela L. Jones & Stanley E. Griffis & Matthew A. Schwieterman & Patricia J. Daugherty, 2019. "Examining the Impact of Shipping Charge Fairness on Consumer Satisfaction and Behavior," Transportation Journal, John Wiley & Sons, vol. 58(2), pages 101-125, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rodrigo Acuna-Agost & Eoin Thomas & Alix Lhéritier, 2021. "Price elasticity estimation for deep learning-based choice models: an application to air itinerary choices," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(3), pages 213-226, June.
    2. Adler, Nicole & Gellman, Aaron, 2012. "Strategies for managing risk in a changing aviation environment," Journal of Air Transport Management, Elsevier, vol. 21(C), pages 24-35.
    3. Luis Moreno & Ana Ramon & Andrés Pedreño, 2015. "The Development of Low-cost Airlines and Tourism as a Competitiveness Complementor: Effects, Evolution and Strategies," Journal of Tourism, Sustainability and Well-being, CinTurs - Research Centre for Tourism, Sustainability and Well-being, University of Algarve, vol. 3(4), pages 262-274.
    4. Vinayak Deshpande & Mazhar Arıkan, 2012. "The Impact of Airline Flight Schedules on Flight Delays," Manufacturing & Service Operations Management, INFORMS, vol. 14(3), pages 423-440, July.
    5. Andrei Afilipoaei & Gustavo Carrero, 2023. "A Mathematical Model of Financial Bubbles: A Behavioral Approach," Mathematics, MDPI, vol. 11(19), pages 1-17, September.
    6. World Bank, 2009. "The Service Revolution in South Asia," World Bank Publications - Reports 19332, The World Bank Group.
    7. Rakotonarivo, O. Sarobidy & Bredahl Jacobsen, Jette & Poudyal, Mahesh & Rasoamanana, Alexandra & Hockley, Neal, 2018. "Estimating welfare impacts where property rights are contested: methodological and policy implications," Land Use Policy, Elsevier, vol. 70(C), pages 71-83.
    8. Juan Martín & Gustavo Nombela, 2007. "Microeconomic impacts of investments in high speed trains in Spain," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(3), pages 715-733, September.
    9. Escobari, Diego, 2014. "Estimating dynamic demand for airlines," Economics Letters, Elsevier, vol. 124(1), pages 26-29.
    10. Tolcha, Tassew Dufera & Njoya, Eric Tchouamou & Christidis, Panayotis, 2026. "Exploring the determinants of domestic air travel across Africa," Journal of Air Transport Management, Elsevier, vol. 131(C).
    11. Rodrigo V. Ventura & Manoela Cabo & Rafael Caixeta & Elton Fernandes & Vicente Aprigliano Fernandes, 2020. "Air Transportation Income and Price Elasticities in Remote Areas: The Case of the Brazilian Amazon Region," Sustainability, MDPI, vol. 12(15), pages 1-18, July.
    12. Bhadra, Dipasis & Kee, Jacqueline, 2008. "Structure and dynamics of the core US air travel markets: A basic empirical analysis of domestic passenger demand," Journal of Air Transport Management, Elsevier, vol. 14(1), pages 27-39.
    13. Tomasz Stanisław Szopiński & Robert Nowacki, 2014. "Plane Ticket Price Dispersion in the Online Selling System in Poland," Contemporary Economics, Vizja University, vol. 8(2), June.
    14. Paraschi, Elen Paraskevi & Georgopoulos, Antonios & Papatheodorou, Andreas, 2020. "Abiotic determinants of airport performance: Insights from a global survey," Transport Policy, Elsevier, vol. 85(C), pages 33-53.
    15. Xu, Yifan & Adler, Nicole & Wandelt, Sebastian & Sun, Xiaoqian, 2024. "Competitive integrated airline schedule design and fleet assignment," European Journal of Operational Research, Elsevier, vol. 314(1), pages 32-50.
    16. Girardet, Daniel & Spinler, Stefan, 2013. "Surcharge management of kerosene and CO2 costs for airlines under the EU's emission trading," Journal of Air Transport Management, Elsevier, vol. 26(C), pages 25-30.
    17. Appold, Stephen J. & Kasarda, John D., 2006. "The appropriate scale of US airport retail activities," Journal of Air Transport Management, Elsevier, vol. 12(6), pages 277-287.
    18. Sotirios Thanos & Mark Wardman & Abigail Bristow, 2011. "Valuing Aircraft Noise: Stated Choice Experiments Reflecting Inter-Temporal Noise Changes from Airport Relocation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(4), pages 559-583, December.
    19. Guofeng Ma & Yue Ding & Junyi Ma, 2022. "The Impact of Airport Physical Environment on Perceived Safety and Domestic Travel Intention of Chinese Passengers during the COVID-19 Pandemic: The Mediating Role of Passenger Satisfaction," Sustainability, MDPI, vol. 14(9), pages 1-18, May.
    20. Chiuling Lu & Ann Yang & Jui-Feng Huang, 2015. "Bankruptcy predictions for U.S. air carrier operations: a study of financial data," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(3), pages 574-589, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:transj:v:50:y:2011:i:3:p:232-250. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.