This study investigates the price elasticity of demand in the European low-cost carrier (LCC) industry by analysing Internet fares for all easyJet flights departing from the Amsterdam Schiphol ...airport towards 21 European destinations between March and September 2015. Results suggest that the price elasticity of demand greatly varies across different dimensions, ranging from −0.535 for the business-oriented route of Hamburg to −1.915 for the leisure-oriented route of Split. Price elasticity is also found to be higher for reservations made more days in advance, for reservations and departures occurring on weekends, and for flights taking off during lunchtime and in the summer period. All results are consistent with the different behaviours of leisure and business passengers and the ongoing increase in the business component of the LCC passenger mix.
•This article analyses price elasticity of demand for leisure and business destinations.•easyJet's price elasticity of flights departing from the AMS airport is overall inelastic.•During the summer, price elasticity of demand on average increases.•Price elasticity is higher for weekends-reservations and -departures and lunchtime flights.•Price elasticity is higher for reservations made more days in advance.
Abstract
Traditional architectural thought and practice decrees that buildings should be spatially homogeneous, revealing themselves to their viewers and users as episodic and carefully orchestrated ...wholes.
Giacomo Pala
argues that the world is more complex than this, and that the digital has further enhanced its heterogeneous festival of formal, semiotic and spatial jump‐cutting to establish conjunctions from which we can be architecturally inspired.
The aviation industry is facing pressure from stakeholders to transform towards greater sustainability. From a managerial and marketing perspective, not only the actual implementation and ...achievements of sustainability measures, but also their communication to stakeholders is likely to be crucial - and in many cases even legally required. This research evaluates the scope of sustainability and corporate social responsibility (CSR) reporting of Europe's five largest airline groups for or from the year 2019, just prior the COVID-19 crisis. For this, dedicated sustainability reports and non-financial statements of Air France-KLM, easyJet, International Airlines Group, Lufthansa Group and Ryanair are evaluated and compared in a qualitative content analysis, using the Standards of the Global Reporting Initiative (GRI) as reference categories. The results indicate that the sustainability publications differ by airline business model, as the two low-cost carriers report less content in non-financial statements only, without publishing any standalone sustainability reports. Independent of the business model, most airlines surprisingly neglect the economic dimension of sustainability. The airline sector could improve its sustainability marketing by reporting both their economic, environmental, and social impacts and achievements.
This paper extends the literature on low-cost carriers' pricing strategies by investigating the presence of quantity price discrimination implemented through a two-part tariff in offered fares. By ...analysing Internet fares for all easyJet flights departing from the Amsterdam Schiphol airport between March and April 2015, we search for price differentials based on the number of seats booked by a single consumer. We find that the lowest average unit price is associated with a single consumer reserving 5 seats. On average, the per-seat discount for a single consumer reserving 5 seats is €9.48, which is 14% of the single-seat fare. Additionally, a multivariate analysis shows that quantity discounts are greater for flights with a larger fraction of available seats at the time of booking, the seats are booked longer in advance, and the destination's gross domestic product per capita is greater. Conversely, quantity discounts are lower for longer routes, larger destination airports, and routes for which easyJet's market share is higher.
•easyJet's pricing strategy includes quantity price discrimination.•The maximum quantity discount occurs when a single consumer reserves 5 seats.•The 5-seat discount offered by easyJet is €9.48.•Discounts vary according to both flight and route characteristics.
The main objective of this work is to contribute to the existing literature on the effects of competition from Low-Cost Carriers on airfares in the European non-stop market. To the best of our ...knowledge, this is the first paper describing the impact of the operations of LCCs on ticket prices in Europe using data from real transactions (i.e., passengers ticket data including prices) covering all routes and not only a small sample. Data is taken from Official Aviation Guide (OAG) and consist of monthly price observations charged by all carriers marketing and operating flights in Western and Eastern Europe between January 2016 and December 2019. We find evidence that fares are about 11% lower if at least one LCC is operating in the route in comparison to markets where only FSCs are present. By taking the average fare in our data set for a non-stop flight, this reduction amounts to about $11 US savings. Moreover, we notice that FSCs increase their fares if the LCCs market share is lower than 19%; beyond this threshold they also reduce prices in order to match the strong competition and robust market presence of LCCs. These results confirm that liberalization has long-run effects, as LCCs are still cheaper after about 30 years since the beginning of liberalization and after their robust market consolidation.
Alejandro Zaera‐Polo looks at the implication of ‘cheapness’ pursued by some of today's most successful companies, which deliver no‐frills services and products to the biggest number of customers ...possible. This is a strategy perhaps best exemplified by EasyJet and IKEA. Setting aside the impact on global warming, what implications does this approach have for democratisation and urbanisation? And what can architecture, in particular, learn from it at time when it is turning its back on its aspirations for the iconic and the grand visions of the first decade of this century.
Traditional theories of airline pricing maintain that fares monotonically increase as fewer seats remain available on a flight. This implies a monotonically increasing temporal profile of fares. In ...this paper, we exploit the presence of drops in offered fares over time as an indicator of an active yield management intervention by two main European Low-Cost Carriers, and measure its effectiveness. We find that reduction of the offered airfare by one standard deviation raises a flight's load factor on average by 2.7 percent, a measure unaffected by the intensity of competition in a route. Furthermore, yield management interventions are less effective the higher the share of leisure (holiday and visiting friends and relatives) traffic on the route. This result runs counter to the common perception of leisure passengers being more responsive to price changes.
•Various forms of yield management interventions are considered in the study.•Is dynamic yield management effective in raising a flight's load factor?•Active yield management has a strong positive impact on a flight's load factor.•This effect does not appear to depend on the degree of competition in a route.•The impact is non significant in routes that are mainly used by leisure travellers.
The Low-cost fare response to new entry Malighetti, Paolo; Stefano, Paleari; Redondi, Renato
European transport research review,
12/2013, Letnik:
5, Številka:
4
Journal Article
Recenzirano
Odprti dostop
Purpose
This study analyzes easyJet’s fare response to new entry. Traditionally, this stream of literature has focused on the reactions of network carriers to competition from low-cost carriers. As ...low-cost services spread, however, the number of low-cost incumbents is rising. This paper aims to shed light 16 on low-cost price behaviour in the European context.
Method
The analysis is based on an original dataset composed of all fares offered by easyJet up to 90 days beforedeparture, on all flights during the period 2007–2009. We focus on short-term price reactions by employing the event study methodology. We decompose the price response into three terms: the average fare, dynamic pricing, and fare dispersion around the predicted price curve.
Results
Our results show that easyJet’s temporal price discrimination tends to decrease after a new entry, especially when the new entrant is a traditional carrier. There is also some evidence for an average fare reduction of about 3 %.
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