Price reaction in New Zealand’s duopolistic airline market
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Date
2023-02-11
Open Access Location
Journal Title
Journal ISSN
Volume Title
Publisher
Taylor and Francis Group
Rights
(c) The author/s
CC BY 4.0
CC BY 4.0
Abstract
This study investigates the price reaction in a duopolistic market where two airlines (a full-service and a low-cost carrier) dominate the domestic aviation market. Utilising a rich dataset of 53,463 matched airfares for Air New Zealand and Jetstar in New Zealand from September to December 2019, we found a U-shaped relationship (from Jetstar to Air New Zealand) and an inverted U-shaped relationship (from Air New Zealand to Jetstar) between the two airfares. While distinguishing their different business models, such behaviour has not been empirically discussed in the literature. This study can be extended to larger and more complex markets.
Description
Keywords
New Zealand’s duopolistic domestic aviation market, airline competition, Air New Zealand, Jetstar, airfare, price reaction
Citation
Ngo T, Tsui KWH. (2023). Price reaction in New Zealand’s duopolistic airline market. International Journal of the Economics of Business. 30. 2. (pp. 159-184).