Isolating the Internet Price Effect. Bill Brunger , SVP, Network, Continental Airlines (ret.) and Doctoral Candidate, Case Western Reserve University. Motivation: So What Has Happened? (Some level of causality seems obvious). Industry Structure obviously changed….
SVP, Network, Continental Airlines
Domestic US Low Cost Carrier growth.
Rise of Internet
Domestic US Low Cost Carrier growth (No WN,HP).
We Had Expected Fragmentation
Or Google: Brunger Impact Airline
- Effects of trip type, FFP status & demography?
5. Change with respect to timing, specifically the decision about when to purchase the ticket.
& They Believe that They Find Lower Fares
But this is primarily a market segmentation effect…
Customers who use Internet/OnlineTravel Agencies (OTAs) to purchase leisure trips pay significantly less (11.5% in our sample) for similar itineraries in the same markets than those who purchase through traditional travel agencies even though the fares and inventory offered by the airlines are identical. The purpose of this study is to examine this Internet Price Effect (IPE).
expect to find???
Using My Regression Equation:
FP= ß0 + ß1*DC + ß2*TC+ ß3*CD + ß4*MS + ß5*OpV + ε
DV = fare paid as percent of mean; All coefficients significant at .01 level except the red