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A case study of pricing strategies in European airline markets: The London – Amsterdam route

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  • Alderighi, Marco
  • Cento, Alessandro
  • Piga, Claudio A.

Abstract

Published fares London–Amsterdam are used to examine the pricing practices of low-cost and legacy carriers when operating in a large and crowded market. We investigate two strategies of market segmentation involving the time before departure the ticket has been bought, inter-temporal segmentation, and the duration of the stay, implicit segmentation. We find inter-temporal price discrimination emerges as an important strategy for all pricing but the two legacy carriers involved, British Airways and KLM, differ in their use of stay restrictions; British Airways does not assign a specific role to the duration of stay, while KLM make use of such rules extensively in price setting.

Suggested Citation

  • Alderighi, Marco & Cento, Alessandro & Piga, Claudio A., 2011. "A case study of pricing strategies in European airline markets: The London – Amsterdam route," Journal of Air Transport Management, Elsevier, vol. 17(6), pages 369-373.
    • Handle: RePEc:eee:jaitra:v:17:y:2011:i:6:p:369-373
    DOI: 10.1016/j.jairtraman.2011.02.009
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    References listed on IDEAS

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    3. L. Moreno-Izquierdo & A.B. Ramón-Rodríguez & J.F. Perles-Ribes, 2016. "Pricing Strategies of the European Low-Cost Carriers Explained Using Porter's Five Forces Model," Tourism Economics, , vol. 22(2), pages 293-310, April.
    4. Andrés Martínez, María-Encarnación & Alfaro Navarro, José-Luis & Trinquecoste, Jean-François, 2017. "The effect of destination type and travel period on the behavior of the price of airline tickets," Research in Transportation Economics, Elsevier, vol. 62(C), pages 37-43.
    5. Graziano Abrate & Giampaolo Viglia & Javier Sanchez García & Santiago Forgas-Coll, 2016. "Price Competition within and between Airlines and High-Speed Trains: The Case of the Milan—Rome Route," Tourism Economics, , vol. 22(2), pages 311-323, April.
    6. Cattaneo, Mattia & Malighetti, Paolo & Morlotti, Chiara & Redondi, Renato, 2016. "Quantity price discrimination in the air transport industry: The easyJet case," Journal of Air Transport Management, Elsevier, vol. 54(C), pages 1-8.
    7. Labake Temitope Adamolugbe & Chijioke Udechukwu Akpudo & Mobolaji Stephen Stephens & Chukwuemeka Albert Enyinda, 2023. "Factors Influencing the Airline Decision-Making Process in Planning Pricing Mechanisms in the Nigerian Aviation Industry," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(11), pages 752-762, November.
    8. Eugenio-Martin, Juan L. & Inchausti-Sintes, Federico, 2016. "Low-cost travel and tourism expenditures," Annals of Tourism Research, Elsevier, vol. 57(C), pages 140-159.
    9. Tin H. Ho & Dat T. Nguyen & Thanh Ngo & Tu D. Q. Le, 2021. "Airfares Data in New Zealand Domestic Aviation Market," Sustainability, MDPI, vol. 13(16), pages 1-5, August.
    10. Tomasz Stanisław Szopiński & Robert Nowacki, 2015. "The Influence of Purchase Date and Flight Duration over the Dispersion of Airline Ticket Prices," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 9(3), September.

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