Competitive Price strategies of Low Cost Airlines in their Business Life Cycle

摘要

The objective of this study is to examine the nature of competitive pricing strategies behavior of low cost airlines in their business life cycle. This study comprised of two regimes of primary data, the data have been traced from the airlines' websites for one regional route and six domestic routes for two durations of 60 days. The results yielded 7883 fare quotes; the data were further analysis to compare the ticket price movement and to identify the market leader in the low cost airlines industry. Granger Causality Test has concluded that in these oligopoly and duopoly market structure, the tendency of low cost airlines was more towards Barometric price leadership. Every firm is vulnerable to attack by the competitors, low cost airline practise low price strategy and it is believed that it is difficult to maintain over time and competitive pricing represents the slippery slope of a price war.