Discount opportunities in hub-and-spoke networks: The determinants of hidden-city ticketing

Alexander Luttmann and Alberto Gaggero

MPRA Paper from University Library of Munich, Germany

Abstract: We offer a comprehensive empirical study on hidden-city ticketing (HCT), a pricing phenomenon in the airline industry that occurs when the fare for a nonstop trip from A to B is more expensive than a connecting trip from A to B and B to C. Exploiting a unique panel of over 772 thousand fares for flights departing between October 1st, 2019 and February 29th, 2020, we find that HCT depends on route competition (both on A-B and A-C routes), largely occurs in the last week to departure, and primarily occurs on carriers that operate large hub-and-spoke networks (e.g., American, Delta, and United).

Keywords: advance-purchase; airline pricing; competition; hidden-city ticketing; price discrimination. (search for similar items in EconPapers)
JEL-codes: D40 L11 L13 L93 (search for similar items in EconPapers)
Date: 2022-07-26
New Economics Papers: this item is included in nep-com, nep-ind, nep-reg, nep-tre and nep-ure
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Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/113960/1/MPRA_paper_113960.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/116577/9/MPRA_paper_116577.pdf revised version (application/pdf)

Related works:
Journal Article: The determinants of hidden-city ticketing: Competition, hub-and-spoke networks, and advance-purchase requirements (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:113960

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