Targeting leisure and business passengers with unsegmented pricing

Marco Alderighi, Marcella Nicolini, Claudio A. Piga

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

We analyse the fare setting strategy of a leading European low-cost carrier, Ryanair, which, until recently, adopted an unsegmented pricing policy (all tickets belong to a single fare class). We show that, to account for different demand characteristics, the company adjusts the two main components governing the dynamics of posted fares, namely time (the number of days before departure) and capacity (the current number of available seats). We find that: 1) in routes with a strong presence of leisure (business) traffic, fares are set to be less (more) responsive to the time component; 2) in schedules more suitable for leisure (business) travellers, fares are set to be less (more) responsive to the capacity component.
Original languageEnglish
Pages (from-to)502-512
Number of pages11
JournalTourism Management
Volume54
Early online date22 Jan 2016
DOIs
Publication statusPublished - Jun 2016
Externally publishedYes

Fingerprint

targeting
pricing
pricing policy
Costs
Industry
Seats
cost
Pricing
Leisure
Targeting
traffic
demand
costs
time
Schedule
Seat
Business travellers
Pricing policy
Low-cost carriers

Cite this

Alderighi, Marco ; Nicolini, Marcella ; Piga, Claudio A. / Targeting leisure and business passengers with unsegmented pricing. In: Tourism Management. 2016 ; Vol. 54. pp. 502-512.
@article{f3da0368d889475bbdcebb46038e7b8d,
title = "Targeting leisure and business passengers with unsegmented pricing",
abstract = "We analyse the fare setting strategy of a leading European low-cost carrier, Ryanair, which, until recently, adopted an unsegmented pricing policy (all tickets belong to a single fare class). We show that, to account for different demand characteristics, the company adjusts the two main components governing the dynamics of posted fares, namely time (the number of days before departure) and capacity (the current number of available seats). We find that: 1) in routes with a strong presence of leisure (business) traffic, fares are set to be less (more) responsive to the time component; 2) in schedules more suitable for leisure (business) travellers, fares are set to be less (more) responsive to the capacity component.",
keywords = "Dynamic pricing, Unsegmented pricing, Market segmentation, Ryanair",
author = "Marco Alderighi and Marcella Nicolini and Piga, {Claudio A.}",
year = "2016",
month = "6",
doi = "10.1016/j.tourman.2015.12.014",
language = "English",
volume = "54",
pages = "502--512",
journal = "Tourism Management",
issn = "0261-5177",
publisher = "Elsevier Limited",

}

Targeting leisure and business passengers with unsegmented pricing. / Alderighi, Marco; Nicolini, Marcella; Piga, Claudio A.

In: Tourism Management, Vol. 54, 06.2016, p. 502-512.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Targeting leisure and business passengers with unsegmented pricing

AU - Alderighi, Marco

AU - Nicolini, Marcella

AU - Piga, Claudio A.

PY - 2016/6

Y1 - 2016/6

N2 - We analyse the fare setting strategy of a leading European low-cost carrier, Ryanair, which, until recently, adopted an unsegmented pricing policy (all tickets belong to a single fare class). We show that, to account for different demand characteristics, the company adjusts the two main components governing the dynamics of posted fares, namely time (the number of days before departure) and capacity (the current number of available seats). We find that: 1) in routes with a strong presence of leisure (business) traffic, fares are set to be less (more) responsive to the time component; 2) in schedules more suitable for leisure (business) travellers, fares are set to be less (more) responsive to the capacity component.

AB - We analyse the fare setting strategy of a leading European low-cost carrier, Ryanair, which, until recently, adopted an unsegmented pricing policy (all tickets belong to a single fare class). We show that, to account for different demand characteristics, the company adjusts the two main components governing the dynamics of posted fares, namely time (the number of days before departure) and capacity (the current number of available seats). We find that: 1) in routes with a strong presence of leisure (business) traffic, fares are set to be less (more) responsive to the time component; 2) in schedules more suitable for leisure (business) travellers, fares are set to be less (more) responsive to the capacity component.

KW - Dynamic pricing

KW - Unsegmented pricing

KW - Market segmentation

KW - Ryanair

U2 - 10.1016/j.tourman.2015.12.014

DO - 10.1016/j.tourman.2015.12.014

M3 - Article

VL - 54

SP - 502

EP - 512

JO - Tourism Management

JF - Tourism Management

SN - 0261-5177

ER -