2 research outputs found
Airline market power and intertemporal price dispersion
This paper analyzes the empirical relationship between market structure and price dispersion in the airline markets connecting the UK and the Republic of Ireland. Price dispersion is measured by a number of inequality indexes, calculated using fares posted on the Internet at specific days before takeoff. We find a negative correlation between market dominance and price dispersion; thus competition appears to hinder the airlines' ability to price discriminate to exploit consumers' heterogeneity in booking time preferences. Moreover, in the Christmas and Easter periods of high demand, fares are less dispersed, possibly because airlines target a less heterogenous set of consumers
Airline competition in the British Isles
We study the relationship between pricing and market structure on
the routes connecting the UK and the Republic of Ireland. Because in
2007 the European Commission prohibited the takeover of Aer Lingus by
Ryanair, the analysis focuses on their pricing strategies in particular. We
use an original dataset of fares posted on-line, which allows to control for
the fares' intertemporal pattern for each specific
flight and each carrier's
specific yield management system. Our evidence supports the European
Commission's view that the elimination of a competitor in the Irish airline
market is likely to have harmful consequences for consumers