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Title: Price rivalry in airline markets: A study of a successful strategy of a network carrier against a low-cost carrier
Author: Fageda, Xavier, 1975-
Jiménez González, Juan Luis
Perdiguero, Jordi
Keywords: Transport aeri
Competència econòmica
Logística industrial
Commercial aeronautics
Business logistics
Issue Date: 2010
Publisher: Universitat de Barcelona. Institut de Recerca en Economia Aplicada Regional i Pública
Series/Report no: [WP E-IR10/07]
Abstract: Competition in airline markets may be tough. In this context, network carriers have two alternative strategies to compete with low-cost carriers. First, they may establish a low-cost subsidiary. Second, they may try to reduce costs using the main brand. This paper examines a successful strategy of the first type implemented by Iberia in the Spanish domestic market. Our analysis of data and the estimation of a pricing equation show that Iberia has been able to charge lower prices than rivals with its low-cost subsidiary. The pricing policy of the Spanish network carrier has been particularly aggressive in less dense routes and shorter routes.
Note: Reproducció del document publicat a:
It is part of: IREA – Working Papers, 2010, IR10/07
ISSN: 2014-1254
Appears in Collections:Documents de treball (Institut de Recerca en Economia Aplicada Regional i Pública (IREA))

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