Impacts of entry in airline markets: effects of revenue management on traditional measures of airline performance

摘要

Assessment of unfair competitive practices in airline markets is typically based on the analysis of changes in aggregate measures of airline performance, such as average fares, traffic and revenues. Simulation results show that these measures can be greatly affected by the competitive revenue management situation. For example, average fares on the incumbent carrier can either increase or decrease following entry by a new competitor, depending on whether one or both airlines perform revenue management. Consequently, these measures on their own do not constitute a reliable indication of the response of incumbent carriers, and provide even less information on their strategic intent, which is critical in identifying predation.