The Influence of Purchase Date and Flight Duration over the Dispersion of Airline Ticket Prices

• Autorzy: Tomasz Stanisław Szopiński , Robert Nowacki
• Języki publikacji: EN

Abstrakty

EN

For many years, the air travel market has been the most regulated sector of the economy. Within the last few decades, it has undergone profound change, which is largely a consequence of changes in the law. Another factor that exerted influence on the market was the popularization of new information and communication technologies that affected the interaction between service providers and clients. Due to the application of modern technologies, it is easier for tradesmen to implement pricing policies to maximize profits or minimize losses. In turn, customers acquired a tool for comparing prices, which aids them in selecting the most advantageous offer from their point of view. This study aims to provide an answer to the following questions: how does flight duration affect the price dispersion of airline tickets and does price dispersion increase as the date of departure approaches. To answer these questions, airline ticket prices for flights on the route: Warsaw-London-Warsaw and the route: Warsaw-New York-Warsaw were observed between August 14 and November 14, 2014. Price dispersion increased on both routes as the date of departure approached. Analysis of price variation over time has revealed that longer flights (WAW-ZYP-WAW vs WAW-LHR-WAW) were less dispersed in terms of prices in the period under analysis. (original abstract)

Słowa kluczowe

EN

Airlines; Touristic travel; Prices

PL

Linie lotnicze; Podróże turystyczne; Ceny

• Czasopismo: Contemporary Economics
• Rocznik: 2015
• Tom: 9
• Numer: nr 3
• Strony: 353--366

Twórcy

autor

Tomasz Stanisław Szopiński

• University of Finance and Management in Warsaw, Poland

autor

Robert Nowacki

• University of Finance and Management in Warsaw, Poland

Bibliografia

• Alderighi M., Cento A. & Piga C.A. (2011). A case study of pricing strategies in European airline markets: The London - Amsterdam route. Journal of Air Transport Management, 17 (6), 369-373.
• Alderighi M., Cento A., Nijkamp P., Rietveld P. (2012). Competition in the European aviation market: the entry of low-cost airlines. Journal of Transport Geography, 24, 223-233.
• Assaf A.G., Josiassen A. (2012). European vs. U.S. airlines: Performance comparison in a dynamic market. Tourism Management, 33 (2), 317-326.
• Bachis E., Piga C.A. (2011). Low-cost airlines and online price dispersion. International Journal of Industrial Organization, 29 (6), 655-667.
• Bigné E., Hernández B., Ruiz C. & Andreu L. (2010). How motivation, opportunity and ability can drive online airline ticket purchases. Journal of Air Transport Management, 16 (6), 346-349.
• Bilotkach V., Gorodnichenko Y., & Talavera O. (2010). Are airlines' price-setting strategies different? Journal of Air Transport Management, 16 (1), 1-6.
• Borenstein S. & Rose N. (1994). Competition and Price Dispersion in the U.S. Airline Industry. Journal of Political Economy, 102 (4), 653-683.
• Brons M., Pels E., Nijkamp P. & Rietveld P. (2002). Price elasticities of demand for passenger air travel: a meta-analysis. Journal of Air Transport Management, 8(3), 165-175.
• Brunger W.G. & Perelli S. (2009). The impact of the internet on airline fares: Customer perspectives on the transition to internet distribution. Journal Of Revenue & Pricing Management, 8 (2-3), 187-199.
• Brunger W.G. (2010). The impact of the Internet on airline fares: The 'Internet Price Effect'. Journal of Revenue & Pricing Management, 9 (1-2), 66-93.
• Brynjolfsson E., Dick A. & Smith M. (2010). A nearly perfect market? Quantitative Marketing & Economics, 8 (1), 1-33.
• Buhalis D., Law R. (2008). Progress in information technology and tourism management: 20 years on and 10 years after the Internet. Tourism Management, 29 (4), 609-623.
• Button K. (2009). The impact of US-EU "Open Skies" agreement on airline market structures and airline networks. Journal of Air Transport Management, 15, 59-71.
• Castillo-Manzano J.I., López-Valpuesta L. (2010). The decline of the traditional travel agent model. Transportation Research, 46 (5), 639-649.
• Castells M. (2003). Galaktyka Internetu. Refleksje nad Internetem, Biznesem i Społeczeństwem [The Internet Galaxy: Reflections on the Internet, Business and Society]. Poznań: Dom Wydawniczy Rebis.
• Chakrabarty D., Kutlu L. (2014). Competition and price dispersion in the airline markets. Applied Economics, 46 (28), 3421-3436.
• Chellappa R.K., Sin R.G. & Siddarth S. (2011). Price Formats as a Source of Price Dispersion: A Study of Online and Offline Prices in the Domestic U.S. Airline Markets. Information Systems Research, 22 (1), 83-98.
• Dai M., Liu Q., Serfes K. (2014). Is the effect of competition on price dispersion non-monotonic? Evidence from the U.S. airline industry. The Review of Economics and Statistics, 96 (1), 161-170.
• Dobruszkes F. (2013). The geography of European low-cost airline networks: a contemporary analysis. Journal of Transport Geography, 28, 2875-2888.
• Domínguez-Menchero J.S., Rivera J., Torres-Manzanera E. (2014). Optimal purchase timing in the airline market. Journal of Air Transport Management, 40, 137-143.
• Elhaj M. (2012). Factors that contribute to consumers' perceptions of online and traditional travel reservation systems. Anatolia: An International Journal Of Tourism & Hospitality Research, 23 (1), 118-122.
• Escobar-Rodríguez T., Carvajal-Trujillo E. (2013). Online drivers of consumer purchase of website airline tickets. Journal of Air Transport Management, 58-64.
• Gaggero A.A. & Piga C.A. (2011). Airline Market Power and Intertemporal Price Dispersion. The Journal of Industrial Economics, 59 (4), 552-577.
• Gamper H. (2012). How Can Internet Comparison Sites Work Optimally for Consumers? Journal of Consumer Policy, 35 (3), 333-353.
• Gerardi K.S. & Shapiro A. (2009). Does Competition Reduce Price Dispersion? New Evidence from the Airline Industry. Journal of Political Economy, 117 (1), 1-37.
• Graham M. & Bansal P. (2007). Consumers' Willingness to Pay for Corporate Reputation: The Context of Airline Companies. Corporate Reputation Review, 10 (3), 189-200.
• Granados N.F., Kauffman R.J., Lai H. & Lin H. (2012a). Decommoditization, Resonance Marketing, and Information Technology: An Empirical Study of Air Travel Services amid Channel Conflict. Journal Of Management Information Systems, 28 (2), 39-74.
• Granados N., Kauffman R.J., Lai H. & Lin H. (2012b). À la Carte Pricing and Price Elasticity of Demand in Air Travel. Decision Support System, 53 (2), 381-394.
• Grotte J. (2013). Budget Tourism - Transition Economy. International Journal of Business Insights & Transformation, 6 (2), 104-109.
• Grover V., Lim J. & Ayyagari R. (2006). The Dark Side of Information and Market Efficiency in E-Markets. Decision Sciences, 37 (3), 297-324.
• Isler K. & D'Souza E. (2009). GDS capabilities, OD control and dynamic pricing. Journal of Revenue & Pricing Management, 8 (2-3), 255-266.
• Kabassi K. (2010). Personalizing recommendations for tourists. Telematics and Informatics, 27 (1), 51-66.
• Koo B., Mantin B. & O'Connor P. (2011). Online distribution of airline tickets: Should airlines adopt a single or a multi-channel approach? Tourism Management, 32 (1), 69-74.
• Lian J. & Denstadli J. (2010). Booming Leisure Air Travel to Norway - The Role of Airline Competition. Scandinavian Journal of Hospitality & Tourism, 10 (1), 1-15.
• Lin P., Chen C. & Song M. (2009). Price dispersion of online air tickets for short distance international routes. Service Industries Journal, 29 (11), 1597-1613.
• Lott J.R. & Roberts R.D. (1991). A Guide to the Pitfalls of Identifying Price. Discrimination. Economic Inquiry, 29 (1), 14-23.
• Magnini V.P. & Karande K. (2011). Understanding consumer services buyers based upon their purchase channel. Journal of Business Research, 64 (6), 543-550.
• Mantin B. & Koo B. (2010). Weekend effect in airfare pricing. Journal of Air Transport Management, 16 (1), 48-50.
• Martin-Consuegra D., Molina A. & Esteban Á. (2006). Customer Orientation in the Airline Industry: A Comparison between Travelers and Airlines. e-Review of Tourism Research, 4 (5), 108-118.
• Nelson R.A., Cohen R. & Rasmussen F. (2007). An Analysis of Pricing Strategy and Price Dispersion on the Internet. Eastern Economic Journal, 33 (1), 95-110.
• Narangajavana Y, Garrigos-Simon F.J., Sanches-Garcia J. (2014). Prices, prices and prices: A Study in the Passenger Airline Industry. Tourism Management, 41, 28-42.
• Obermeyer A., Evangelinos C. & Püschel R. (2013). Price dispersion and competition in European airline markets. Journal of Air Transport Management, 26, 31-34.
• Palmer A. & Boissy S. (2009). The effects of airline price presentations on buyers' choice. Journal Of Vacation Marketing, 15 (1), 39-52.
• Petrescu M. (2011). Online price dispersion - more than imperfect information. Journal Of Product & Brand Management, 20 (7), 541-548.
• Pijet-Migoń E. (2012). Zmiany rynku lotniczych przewozów pasażerskich w Polsce po akcesji do Unii Europejskiej [Changes on the Market of Air Travel in Poland after Accession to the European Union]. Rozprawy Naukowe Instytutu Geografii i Rozwoju Regionalnego 25. Wrocław: Uniwersytet Wrocławski.
• Roma P., Zambuto F., Perrone G. (2014). Price dispersion, competition, and the role of online travel agents: Evidence from business routes in the Italian airline market. Transportation Research, 69, 146-159.
• Rothkopf M. & Wald A. (2011). Innovation in Commoditized Services: A Study In The Passenger Airline Industry. International Journal Of Innovation Management, 15 (4), 731-753.
• Sam M.F.M. & Tahir M.N.H. (2009). Website Quality and Consumer Online Purchase Intention of Air Ticket. International Journal of Basic & Applied Sciences, 9 (10), 4-9.
• Sengupta A. & Wiggins S.N. (2012). Comparing Price Dispersion on and off the Internet Using Airline Transaction Data. Review of Network Economics, 11 (1), DOI: 10.1515/1446-9022.1244.
• Stavins J. (2001). Price Discrimination in the Airline Market: The Effect of Market Concentration. Review of Economics & Statistics, 83 (1), 200-202.
• Squalli J. (2005). Optimal fares under uncertainty about airline safety. Applied Economics Letters, 12 (4), 223-226.
• Szopiński T. (2012). E-konsument na rynku usług [Econsumer on the Market for Services]. Warszawa: CeDeWu.
• Szopiński T. & Nowacki R. (2014). Plane Ticket Price Dispersion in the Online Selling System in Poland. Contemporary Economics, 8 (2), 207-217.
• Valdes V. (2015). Determinants of air travel demand in Middle Income Countries. Journal of Air Transport Management, 42, 75-84.
• Wang D., & Law F.Y.T. (2007). Impacts of Information and Communication Technologies (ICT) on time use and travel behavior: a structural equations analysis. Transportation, 34 (4), 513-527.
• Wang S.W. (2014). Do global airline alliances influence the passenger's purchase decision? Journal of Air Transport Management, 37, 53-59.

Identyfikatory

DOI

10.5709/ce.1897-9254.174