Price asymmetries in European airfares

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dc.contributor.authorScotti, Davide
dc.contributor.authorVolta, Nicola
dc.date.accessioned2018-03-09T15:19:47Z
dc.date.available2018-03-09T15:19:47Z
dc.date.issued2018-03-03
dc.description.abstractThis research analyses airlines' pricing decisions in response to changes in the market conditions. We estimate the effects of jet fuel price changes on European airfares at airline/route level by discriminating on the grounds of supplied capacity and markets’ competitive structure. Our results show that airlines tend to adjust fares asymmetrically following a “rocket and feather” behaviour. The asymmetric pricing is marked in periods of decreasing capacity when the increases of fuel price are passed at a higher degree than fuel cost savings. In contrast, when capacity increases the asymmetry is lowered. Moreover, we show that highly competitive markets are characterized by a lower price asymmetry compared to low competition markets. Finally, our results show that airline price asymmetry reaches its maximum when capacity is reduced and competition is low.en_UK
dc.identifier.citationScotti D, Volta N, Price asymmetries in European airfares, Economics of Transportation, Volume 14, June 2018, Pages 42-52en_UK
dc.identifier.issn2212-0122
dc.identifier.urihttp://dx.doi.org/10.1016/j.ecotra.2018.02.002
dc.identifier.urihttps://dspace.lib.cranfield.ac.uk/handle/1826/13067
dc.language.isoenen_UK
dc.publisherElsevieren_UK
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/*
dc.subjectAirlinesen_UK
dc.subjectPrice asymmetryen_UK
dc.subjectPass-through rateen_UK
dc.subjectFuel costen_UK
dc.titlePrice asymmetries in European airfaresen_UK
dc.typeArticleen_UK

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