Targeting leisure and business passengers with unsegmented pricing

Marco Alderighi, Marcella Nicolini and Claudio Piga

Tourism Management, 2016, vol. 54, issue C, 502-512

Abstract: We analyse the fare setting strategy of a leading European low-cost carrier, Ryanair, which, until recently, adopted an unsegmented pricing policy (all tickets belong to a single fare class). We show that, to account for different demand characteristics, the company adjusts the two main components governing the dynamics of posted fares, namely time (the number of days before departure) and capacity (the current number of available seats). We find that: 1) in routes with a strong presence of leisure (business) traffic, fares are set to be less (more) responsive to the time component; 2) in schedules more suitable for leisure (business) travellers, fares are set to be less (more) responsive to the capacity component.

Keywords: Dynamic pricing; Unsegmented pricing; Market segmentation; Ryanair (search for similar items in EconPapers)
JEL-codes: D22 L11 L93 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:touman:v:54:y:2016:i:c:p:502-512

DOI: 10.1016/j.tourman.2015.12.014

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