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

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. ISSN 1094-1665

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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.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Accepted version deposited in accordance with the copyright policy of the publisher.
Faculty/School / Institute/Centre: Historic - Faculty of Business and Law - School of Accounting, Economics and Finance
Date Deposited: 20 Nov 2011 20:19
Last Modified: 11 Feb 2015 05:16
Uncontrolled Keywords: airline pricing; collusion; China
Fields of Research : 15 Commerce, Management, Tourism and Services > 1505 Marketing > 150507 Pricing (incl. Consumer Value Estimation)
22 Philosophy and Religious Studies > 2201 Applied Ethics > 220102 Business Ethics
14 Economics > 1402 Applied Economics > 140217 Transport Economics
Socio-Economic Objective: B Economic Development > 91 Economic Framework > 9102 Microeconomics > 910203 Industrial Organisations
Identification Number or DOI: 10.1080/10941665.2011.588876

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