Abstract

http://ssrn.com/abstract=2100496
 
 

References (11)



 


 



Price Effects and Switching Costs of Airlines Frequent Flyer Program


Claudio A. Agostini


Universidad Adolfo Ibañez

Diego Inostroza


affiliation not provided to SSRN

Manuel Willington


Escuela de Gobierno - Universidad Adolfo Ibáñez

July 4, 2012


Abstract:     
Frequent flier programs create a switching cost for the consumer and allow firms to exercise market power. In Chile there is a dominant airline in domestic markets that has a frequent flyer program with a large number of affiliates and it faces some competition from two small carriers that do have a frequent flyer program. Using a unique dataset for Chile we estimate the switching cost of each airline and the impact of the dominant airline frequent flyer program on prices. The results show a fare premium of around 18% due to the frequent flyer program.

Number of Pages in PDF File: 17

Keywords: Airlines, Frequent Flyer Programs, Switching Costs, Chile

JEL Classification: L93, L11

working papers series





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Date posted: July 4, 2012  

Suggested Citation

Agostini, Claudio A. and Inostroza, Diego and Willington, Manuel, Price Effects and Switching Costs of Airlines Frequent Flyer Program (July 4, 2012). Available at SSRN: http://ssrn.com/abstract=2100496 or http://dx.doi.org/10.2139/ssrn.2100496

Contact Information

Claudio A. Agostini (Contact Author)
Universidad Adolfo Ibañez ( email )
Diagonal Las Torres 2640
Santiago
Chile
(562)3311130 (Phone)
HOME PAGE: http://www.uai.cl/profesores/claudio-agostini
Diego Inostroza
affiliation not provided to SSRN ( email )
Carlos Manuel Willington
Escuela de Gobierno - Universidad Adolfo Ibáñez ( email )
Av. Diagonal Las Torres 2640
Peñalolén
Santiago, RM
Chile
Feedback to SSRN


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