Airline Pricing and Competition

This book studies the insights driving airline fares and their time variations both in theory and in practice. Part I first explains the dynamics of airline pricing and the reasons of price dispersion; then it studies how the pattern of airline fares which resemble the shape of a J-curve can be affected by the extent of competition. Thereafter part II is devoted to an empirical application using posted fares of the main carriers of the UK-Ireland airline market. The author first offers a brief description of the market and then presents a graphical analysis to reproduce with real posted fares the pattern of airline pricing throughout the booking period. Finally he conducts an econometric investigation on the effect of market structure on price dispersion of airline fares. The book is written to appeal to both practitioners and readers willing to understand how airline fares evolve throughout the booking period and how their pattern can be affected by extent of competition. Furthermore because its application focuses on the UK-Ireland airline market this book also targets those interested in the Aer Lingus vs Ryanair competition case.