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Price rivalry in airline markets: A study of a successful strategy of a network carrier against a low-cost carrier
Fageda, Xavier, 1975-; Jiménez González, Juan Luis; Perdiguero, Jordi
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.
Transport aeri
Competència econòmica
Logística industrial
Commercial aeronautics
Competition
Business logistics
cc-by-nc-nd, (c) Fageda et al., 2010
http://creativecommons.org/licenses/by-nc-nd/3.0/
Documento de trabajo
Universitat de Barcelona. Institut de Recerca en Economia Aplicada Regional i Pública
         

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