Targeting leisure and business passengers with unsegmented pricing

Marco Alderighi, Marcella Nicolini, Claudio A. Piga

Research output: Contribution to journalArticle

9 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

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