 A tale of airline competition: When full-service carriers undercut low-cost carriers faresAvogadro, Nicolò, Paolo Malighetti, Renato Redondi and Andrea Salanti Journal of Air Transport Management, 2021, vol. 92, issue C Abstract: The pricing of low-cost carriers (LCCs) compared with traditional airlines has been extensively investigated since their inception in the air transport market. Abundant empirical evidence attests that, on average, LCCs' fares (per km) are lower than those usually offered by full-service carriers (FSCs). Such literature, however, paid virtually no attention to the conditions under which LCCs lose their convenience compared to traditional airlines. The purpose of this study is to investigate the occurrence of LCCs sometimes offering higher fares than FSCs on competing flights. By using a dataset expressly collected for this purpose, we are able to quantify its frequency and suggest some possible explanations. These findings concur to cast some questions on the widely held preconception of vertical differentiation between LCCs' and FSCs’ offered services. Further research will be needed in order to understand the relative weight of the suggested factors. Keywords: Airline fare; Dynamic pricing; Low-cost carrier; Product differentiation; Price competition; Indirect competition (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:92:y:2021:i:c:s0969699721000107 DOI: 10.1016/j.jairtraman.2021.102027 Access Statistics for this article Journal of Air Transport Management is currently edited by Anne Graham More articles in Journal of Air Transport Management from Elsevier |
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