Skip to main content
Unpublished Paper
Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline
Fondazione Eni Enrico Mattei Working Papers
  • Marco Alderighi, Università della Valle d'Aosta and Università Bocconi
  • Marcella Nicolini, Università di Pavia and FEEM, Milan
  • Claudio A. Piga, Loughborough University and Rimini Centre Economic Analysis
Date of This Version
4-2-2012
Abstract

Based on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-driven theories predict, it emerges that fares monotonically and substantially increase with the flights occupancy rate. Moreover, as suggested in the literature on intertemporal price discrimination, the adoption of advance purchase discounts is widespread as the departure date nears, but it may be part of a U-shaped temporal profile, where discounts are preceded by periods of relatively higher fares. Finally, the intervention of yield management analysts appears to play a substantial role.

Citation Information
Marco Alderighi, Marcella Nicolini and Claudio A. Piga. "Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline" (2012)
Available at: http://works.bepress.com/marcella_nicolini/3/