Identifying and prioritizing the essential factors on ticket pricing strategy in a local market based on empirical study: Iranian domestic market

Abstract

In the airline industry, ticket pricing is one of the most complex problems that researchers and practitioners are extensively involved on it. This research analyzes the effect of airline and passenger factors on ticket pricing in a domestic market that can play substantial role in long-term ticket pricing. Different factors are collected from literature and these factors are examined by screening techniques to find the most important ones. Regression analysis as a linear technique and Levenberg–Marquardt as a nonlinear technique are applied to find the relationship that exists between the most important ones. Research findings confirm that airport dominance can make a significant effect on ticket pricing. Difference between full service carrier (FSC) and low-cost carrier (LCC) ticket price is one of the other important factors and finally presence of flag airline as a price regulator in a route can affect ticket price. Our findings are based on a real case study and can enhance pricing power for commercial airlines in domestic markets.