Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline

Marco Alderighi (m.alderighi@univda.it), Marcella Nicolini and Claudio Piga
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Marco Alderighi: University of Valle d’Aosta

No 171, Quaderni di Dipartimento from University of Pavia, Department of Economics and Quantitative Methods

Abstract: Based on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-driven theories predict, it emerges that fares monotonically and substantially increase with the flights occupancy rate. Moreover, as suggested in the literature on intertemporal price discrimination, the adoption of advance purchase discounts is widespread as the departure date nears, but it may be part of a U-shaped temporal profile, where discounts are preceded by periods of relatively higher fares. Finally, the intervention of yield management analysts appears to play a substantial role.

Keywords: Pricing policy; Panel Data; Ryanair; Yield Management. (search for similar items in EconPapers)
JEL-codes: D22 L11 L93 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2012-05
New Economics Papers: this item is included in nep-com and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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http://dem-web.unipv.it/web/docs/dipeco/quad/ps/RePEc/pav/wpaper/q171.pdf (application/pdf)

Related works:
Working Paper: Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline (2012)
Working Paper: Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline (2012)
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