Pricing, Competition and Policy in Australasian Air Travel Markets

This article analyzes the effect of the entry of a low-cost carrier and a Fifth Freedom carrier on two established legacy carriers on the New Zealand and Tasman routes. The author analyzed price and other data for more than 1,000 flights on 19 routes flown in 2004 and 2005, in order to observe the effect on market share created by newcomers, Emirates and Pacific Blue, both of which offered lower fares. Data analysis was based on airline pricing and competition across two of the three main Australasian aviation markets, which are uniquely open to competition. The author describes econometric and economic issues, including the impact of merger or cartel on pricing, and the impact of low-cost carriers. He concludes that airfares tended to be lower on routes where both Qantas and Air New Zealand competed, than fares on routes served solely by Air New Zealand. On trans-Tasman routes, where Air New Zealand and Qantas face competition from the LCC Pacific Blue the Fifth Freedom airline Emirates, the newcomers have not achieved more than single-digit market share overall.

Language

  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 01150450
  • Record Type: Publication
  • Source Agency: UC Berkeley Transportation Library
  • Files: BTRIS, TRIS
  • Created Date: Feb 4 2010 7:37PM