Purchase - $38.00

Pricing Dynamics in the Australian Airline Market

18 Pages Posted: 1 Jan 2011  

Nicolas de Roos

University of Sydney

Gordon Mills

University of Sydney - Faculty of Economics

Stephen Whelan

The University of Sydney

Date Written: November 23, 2010

Abstract

We examine price dispersion in a large dataset of Australian domestic airfares. The airlines vary the lowest available fares on successive booking days by restricting the menu of available ticket types, and by changing the prices for some of those types. Our fixed-effects estimator allows us to characterise both of those mechanisms. The greatest price variation occurs on routes involving competition between the two main airlines, Qantas and Virgin; there is greater variation on monopoly routes than on routes pitting Virgin against the Qantas subsidiary, Jetstar. The lowest fares rise rapidly in the week before travel.

JEL Classification: L13, L93

Suggested Citation

de Roos, Nicolas and Mills, Gordon and Whelan, Stephen, Pricing Dynamics in the Australian Airline Market (November 23, 2010). Economic Record, Vol. 86, Issue 275, pp. 545-562, 2010. Available at SSRN: https://ssrn.com/abstract=1733403 or http://dx.doi.org/10.1111/j.1475-4932.2010.00653.x

Nicolas De Roos (Contact Author)

University of Sydney ( email )

University of Sydney
Sydney NSW 2006, NC
Australia

Gordon Mills

University of Sydney - Faculty of Economics ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006
Australia

Stephen Whelan

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006
Australia
612-9036 9251 (Phone)
612-9351-4341 (Fax)

Paper statistics

Downloads
1
Abstract Views
396