Are Airlines' Price Setting Strategies Different?

12 Pages Posted: 26 Dec 2006  

Volodymyr Bilotkach

Newcastle Business School

Oleksandr Talavera

Swansea University - School of Management

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Igor Zubenko

Ostroh Academy National University

Date Written: October 2006

Abstract

Using a sample of fare quotes for non-stop travel from New York to London, this paper investigates the dynamics of offered fares as the departure date nears. We find that the general trend is toward fare increase at an accelerated rate as the departure date approaches. Clear differences in price-setting strategies among the carriers competing on a particular route are documented.

Keywords: airline industry, price dynamics

JEL Classification: L93, D21

Suggested Citation

Bilotkach, Volodymyr and Talavera, Oleksandr and Gorodnichenko, Yuriy and Zubenko, Igor, Are Airlines' Price Setting Strategies Different? (October 2006). Available at SSRN: https://ssrn.com/abstract=953507 or http://dx.doi.org/10.2139/ssrn.953507

Volodymyr Bilotkach (Contact Author)

Newcastle Business School ( email )

208, City Campus East-1
Newcastle upon-Tyne, NE1 8ST
United Kingdom

Oleksandr Talavera

Swansea University - School of Management ( email )

Haldane Building
Singleton Park
Swansea, SA2 8PP
United Kingdom

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

HOME PAGE: http://www.econ.berkeley.edu/~ygorodni/index.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Igor Zubenko

Ostroh Academy National University ( email )

Seminarska Str. 2
Ostroh 265620
Ukraine

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