Frequent flyer programs premium and the role of airport dominance

Escobari, Diego (2010): Frequent flyer programs premium and the role of airport dominance. Published in: Applied Economics Letters , Vol. 18, No. 16 (2011): pp. 1565-1569.

Abstract

This paper estimates a Frequent Flyer Programs (FFP) price premium -- higher fares associated with a larger proportion of travelers using FFP. The results show that FFP affect the entire price distribution, but the effect is larger on lower end fares. In addition, airport dominance increases the premium on less expensive fares but has no effect on the premium associated with the right tail of the price distribution.

• Item Type: MPRA Paper
• Language: English
• Keywords: Frequent Flyer Programs; Pricing; Airlines; Panel Data
• Subjects: L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L93 - Air Transportation; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly ; Monopolization Strategies

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