Market Structure and Airline Pricing: Evidence from the Chinese Airline Industry

摘要

This paper analyzes the factors affecting Chinese airline prices in different market structures (i.e. monopoly, duopoly and oligopoly markets with more than two competitors). We show that airfares generally follow a J-curve pattern. The impact of low-cost carrier competition on ticket prices is found to be positive. Route distance has a positive impact on airfares, whereas the existence of parallel high-speed rail (HSR) service can reduce prices significantly. We also find that influencing factors such as busy airports, HSR frequency, number of daily flights, market share, aircraft sizes, and departure times have distinctive effects under different market structures.