Competition in the European aviation market: the entry of low-cost airlines

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• 作者：Marco Alderighi ; Aless ; ro Cento ; Peter Nijkamp ; Piet Rietveld
• 关键词：Pricing strategies ; Yield management ; Low-cost carriers ; European airline market
• 刊名：Journal of Transport Geography
• 出版年：2012
• 出版时间：September, 2012
• 年：2012
• 卷：24
• 期：Complete
• 页码：223-233
• 全文大小：823 K

文摘

This paper investigates the price-setting behavior of full-service airlines in the European passenger aviation market. We develop a model of airline competition, which accommodates various market structures, some of which include low-cost players. Using data on published airfares of Lufthansa, British Airways, Alitalia and KLM for the main city-pairs from Italy to the rest of Europe, our empirical findings substantially confirm the propositions of the theoretical model. We find that competition among full-service carriers appears to affect the price levels of the business and the leisure segments asymmetrically: there are small reductions in the leisure segments and significant reductions in the business segment of the aviation market. In contrast, competition with low-cost carriers reduces both the business and leisure fares of full-service carriers quite uniformly, with an emphasis on the mid-segment fares.