A Research on Airlines′ Price Competition in Multi-route Market

Abstract

Abstract:

To investigate the problem of airlines′ price competition in the air transportation market with non-stop routes and stop routes, an airlines′ price competition model is established by using the game theory, based on the analysis of structure feature of air transportation market in China, and the effect of differentiation between the airlines and the substitution of multiroute products on the price competition and market equilibrium is discussed. The results show that airlines can get more profit by using joint pricing than separate pricing in the multi-route market. The differentiation between airlines has obvious impact on market equilibrium and market profit. The effect of differentiation depends on the resource that airlines have. The substitution of multi-routes also has obvious impact on airlines′ competition equilibrium.
Key

Key words: air transportation, price competition, game, airlines, multi-route

HU Rong, LI Dongya, JIANG Chao, XU Yuefeng. A Research on Airlines′ Price Competition in Multi-route Market[J]. Industrial Engineering Journal .

References

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