The Shanghai Beijing 'Air Express' service model and its impact on the pricing behaviour of airlines

Article

Zhang, Yahua. 2011. "The Shanghai Beijing 'Air Express' service model and its impact on the pricing behaviour of airlines." Asia Pacific Journal of Tourism Research. 16 (4), pp. 433-443. https://doi.org/10.1080/10941665.2011.588876
Article Title

The Shanghai Beijing 'Air Express' service model and its impact on the pricing behaviour of airlines

ERA Journal ID19652
Article CategoryArticle
Authors
AuthorZhang, Yahua
Journal TitleAsia Pacific Journal of Tourism Research
Journal Citation16 (4), pp. 433-443
Number of Pages11
Year2011
Place of PublicationLondon, United Kingdom
ISSN1094-1665
1741-6507
Digital Object Identifier (DOI)https://doi.org/10.1080/10941665.2011.588876
Web Address (URL)http://www.tandfonline.com/doi/abs/10.1080/10941665.2011.588876
Abstract

Using departure day airfare data, this paper examines the pricing pattern on the Shanghai–Beijing route and reveals anti-competitive pricing behaviour following the introduction of the 'Air Express' service. This new service adds limited value to passengers because of the airport facility constraints. Jointly providing the 'express' service has provided a channel through which the three dominant players can communicate effectively to achieve more stable prices at a higher level. Interestingly, lower prices charged by the fringe airlines on this route were accommodated by the big ones. Meanwhile, the three dominant airlines did not exhibit any obvious deviation in pricing from each other.

Keywordsairline pricing; collusion; China
ANZSRC Field of Research 2020350610. Pricing (incl. consumer value estimation)
500102. Business ethics
380117. Transport economics
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Byline AffiliationsSchool of Accounting, Economics and Finance
Institution of OriginUniversity of Southern Queensland
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