Airline Tickets Research Articles

The Simple Economics of Wholesale Price-Parity Agreements: The Case of the Airline Tickets Distribution Industry*

Abstract This paper clarifies the differences between retail and wholesale price-parity agreements in vertical industries. In contrast to traditional wide and narrow retail price-parity arrangements, the competitive effects of wholesale price-parity depend on the complexity of the vertical supply chain, the business model operated by sellers and distributors, and the strength of competition between direct and indirect distribution channels. While retail price-parity agreements are almost always anticompetitive, wholesale price-parity agreements may positively affect consumer welfare when direct and indirect distribution channels are close substitutes. To demonstrate the relevance of our analysis for competition policy, we illustrate our findings by referring to an industry that has recently attracted policy and regulatory interest on both sides of the Atlantic: the airline ticket distribution industry. We find that, in this industry, while wholesale price-parity agreements always harm airlines, Global Distribution Systems (GDSs) have preferences more aligned with consumers: when consumers benefit from these provisions, GDSs benefit too. JEL: K21, L13, L40

Mapping causalities of airline dynamics in long-haul air transport markets

The introduction of low-cost air transport services to short-haul routes has significantly shaped the structure of this market segment. Recent research investigates and discusses the transferability of the low-cost carrier business model to long-haul routes and identifies respective challenges such as lower cost advantages over the competing full-service network business model. Our paper complements the existing research with a review of airline dynamics in long-haul air transport markets and the subsequent development of a causal loop diagram of the transatlantic air transport market using systems thinking. The objective of this paper is to provide an overview of specific characteristics regarding airline operations in the transatlantic air transport market to investigate the market potential of long-haul low-cost carriers competing with full-service network carriers in this market. We implement these characteristics in a causal loop diagram which comprises the most important elements of and causalities within the long-haul air transport market that affect the development of these elements. These include the generation of transatlantic air transport demand, passenger choice, and airline ticket price and fleet development. The causal loop diagram serves as a framework for qualitative investigation of the market potential of long-haul low-cost services. The paper proves systems thinking to be a feasible approach to map causalities based on knowledge from scientific literature.

Penentuan Harga Tiket Pesawat Lion Air Perspektif Hukum Ekonomi Syariah

Lion Air is a private company engaged in air transportation. It uses a low-cost concept “Low-Cost Carrier” with the slogan “We Make People Fly”. Airline ticket prices sold on Lion Air airline sites and travel agents often experience significant fluctuations. It can be seen in certain moments, such as Eid, long holidays, and other holidays. This study uses a descriptive qualitative approach. This research is research using a field approach in the form of primary data and secondary data. Meanwhile, data sources obtained using observation, interviews, and documentation. Then analyzed descriptively through, reduction, display and conclusion and prescriptive. The implementation of the principle of determining Lion Air ticket prices includes transactions between airlines and consumers, airlines with travel agents, and travel agents with consumers. The transaction in fiqh is classified as an ijarah contract. The second implementation is related to the ticket component which is closely related to fluctuation. Fluctuations caused by the law of normal supply and demand may have consequences, while fluctuations that occur due to company play are categorized as gharar.

Optimizing pricing and packing of variable-sized cargo

Abstract Organizations have successfully used dynamic pricing to optimize revenues for many years, where research and practice have mainly focused on applications with independent, discrete commodities; for example, an airline ticket. In this research we consider applications where the commodity is continuous and the value of the commodity available to sell depends on the combination of previously accepted demand. We focus on vehicle ferries, where the accepted vehicle bookings are packed in lanes in the ferry to leave a usable space for future bookings. Certain combinations of vehicles may result in areas of unusable space, which will affect future revenue. While this application is the focus of the paper, there are numerous industries that face similar challenges including freight and the sale of advertising on television and radio. In this paper, we simultaneously solve the pricing and resource utilization problem to optimality for a discrete set of product types and stochastic demand. Our approach combines a dynamic pricing model with a mixed-integer linear program to optimize the packing. We present results for real-world examples from the ferry industry and discuss extensions to the method to improve the selection of vehicle configurations.

The Flyer’s dilemma and the Logger’s case for climate justice

The Paris Agreement and the United Nations Framework Convention on Climate Change outline mitigation goals by sector. However, this framing is likely to create climate justice issues as it does not explicitly address the contributions of individuals. High emissions from luxury activities like commercial air travel are addressed with voluntary and behavioral change approaches for mitigation while the global rural communities who are dependent on forestry-based livelihoods face carbon credit schemes as well as federal and international conservation interventions despite having a lower per capita carbon footprint. To illustrate this point, the emissions of the average air traveler and several international flights are compared to the average forest user in relation to land use change emissions. In many cases, a single round-trip international flight emits more CO2 per person than the yearly national average of India, Mexico, and Tanzania; all countries with important forestry sectors and indigenous people that depend on forestry-based livelihoods. The disproportionate regulatory burden of forest users in the developing world contrasts their relative contribution to climate change and the unregulated individual behaviors of the global elite. It is time for mandatory offset charges on airline tickets and regulatory framing of mitigation by per capita contributions instead of sector-based approaches.

Applying Integrating Testing of Microservices in Airline Ticketing System

Microservices have been applied on several major systems including airlines. The characteristics of microservices which are independent and also interconnected need to be tested. The testing is done to preserve the system’s sequential stage processes, especially the online ticket reservation. Four features which are the search, booking, payment, and booking info feature are tested. This research performed three stages of testing on the microservices, those are unit testing, integrity testing, and end-to-end testing. Unit testing was conducted to test every function on every nodule, integrity testing was done to test interconnection between microservices, and end-to-end testing was to test the final results obtained after the unit test and integrity test were carried out. The three stages of testing must be done sequentially. The system on the airline provides the valid or correct response. Three stages of testing can be applied on other airlines by obtaining a legal API and can be accessed publicly.

Dynamic pricing with automated purchase-reservation algorithms

We consider the problem of a firm that sells a perishable product such as airline tickets or hotel rooms with a dynamic pricing scheme in the presence of Internet bots. The bots automatically check for changes in the selling price every few seconds and hold the price for a short period by making a tentative reservation. Since the bots are not willing to buy the product, the bots’ reservation does not generate revenue for the firm. In addition, such a behavior would temporarily increase the price in conjunction with decreasing the inventory level. In this paper, we formulate a dynamic pricing model that accounts for tentative reservations made by bots, and derive an optimal pricing policy so as to maximize the total expected revenue. We show the monotone properties of the optimal price: (1) the optimal price decreases with inventory at any given timestep; (2) the optimal price decreases over time even if there is a temporary inventory decrease due to bot reservations. We demonstrate numerically that the optimal pricing policy is robust against the presence of bots, and further show that, as bot activity increases, the optimal price tends to decrease in the first portion of the sales interval.

The effect of novel coronavirus pandemic on tourism share prices

Purpose This paper aims to provide swift feedback to readers and investors on the early effect of novel coronavirus (COVID-19) pandemic outbreak on tourism industry. Design/methodology/approach Three leading consolidators of hotel accommodations, airline tickets and travel services in the tourism industry around the globe, namely, Booking Holdings Inc., Expedia Group and Trip.com Group Ltd. are chosen in this study. First, numerical description is performed on their shares prices and a set of control variables to compare their performances before and during the lockdown because of COVID-19 outbreak. Next, this paper estimates ordinary least squares models with and without exponential generalized autoregressive conditional heteroskedastic specification to establish the nature, significance and magnitude of the pandemic’s early effect on the shares performance of these online travel companies (OTCs). Findings This paper discovers a rapid decline in the performance of tourism industry amid the pandemic outbreak, from the perspective of three leading OTCs, which derive their profits from tourists by providing them online hotel reservation, air-ticketing and packaged-tour business services around the globe. These significant adverse direct and indirect effects testify that tourism-related businesses are extensively locked down by the pandemic outbreak. Research limitations/implications Future studies are encouraged to examine each of the tourism sectors for individual effects. Practical implications This paper provides implications for investors to protect their wealth, and for policymakers to ensure sustainability of tourism industry in the pandemic outbreak and in the future. Originality/value From the perspective of corporate finance, this paper empirically quantifies the early effect of COVID-19 on tourism industry for a quick snapshot.

Assortment Optimization over Dense Universe is Easy

Assortment optimization is an important problem in revenue management arising in industries such as online advertising, retailing and airline ticketing. We study assortment optimization under an arbitrary mixture of multi-nomial logit (MNL) models, when the universe of products is dense. In general, it is NP-hard to approximate assortment optimization under mixture of MNLs model within any reasonable factor. However, if the universe of products is dense, we show that assortment optimization has an optimal solution that is well approximated by a nested-by-revenue policy. We argue this by considering an alternate, continuous-space model where product features follow a density on a continuous space, and offer set can be any open subset on the feature space. In this model, we show that there exists a nested-by-revenue policy that is optimal. This characterization holds regardless of the mixture distribution (including discrete and continuous) and the dimension of feature space. Through this characterization and linking the continuous-space to the standard discrete-item model via a fractional relaxation, we also show that, in the finite and discrete item case, nested-by-revenue performs nearly optimally. In particular, we derive an optimality gap, explicitly dependent on the model parameters, that shrinks to zero under suitable scaling as the number of items grows.

Analisis Sidang Sengketa Pajak oleh Pengadilan Pajak yang Dilaksanakan Diluar Daerah Jakarta Ditinjau dari Azas Ease of Administration

The implementation of the tax dispute trial is regulated by the Law of The Republic of Indonesia No.14/2002 concerning Tax Court article 4 which states that the tax dispute trial conducted by the tax court can be held in Jakarta and other regions if it is deemed necessary. The problem arises when local taxpayers whose tax dispute trials are held outside Jakarta hire a tax consultant from Jakarta, the taxpayer must bear the transportation and accomodation costs of the tax consultant team who come to the region where the trial is held, such as airline tickets, hotels, and other costs during the trial. The tax court institution also bear the travel cost of the official team of tax court judges who will lead the trial, because the judge who leads the trial comes from Jakarta. This study aims to analyze the implementation of tax dispute trial held outside Jakarta in terms of the principle of ease of administration. The results show that in terms of the four ease of administration principles, only the principle of efficiency is not fulfilled. This is due to the high costs incurred by taxpayers and tax courts side to conduct tax dispute trials outside Jakarta.

Faktor yang Mempengaruhi Niat Pembelian Ulang Tiket Pesawat

This research aims to determine the effect of a service delay, firm reputation, and flight schedule availability on the intention to repurchase airline tickets. Data collection using questionnaires distributed to 100 Lion Air passengers who departed from Soekarno Hatta Airport with the aim of Medan, Padang, Palembang, Surabaya, Semarang, Yogyakarta, Bali, Ujung Pandang, Manado, Ambon, and Jaya Pura. Data analysis uses multiple linear regression. All data collected is declared valid and reliable and fits the requirements of the goodness of multiple linear regression. As a result, service delay, firm reputation, and availability of flight schedules have a partial and simulated effect on the intention to repurchase Lion Air tickets. Service delay, firm reputation, and availability of flight schedules contributed to the formation of 78.9% Lion Air ticket repurchase intentions. Schedule availability is the dominant variable in shaping the intention to repurchase Lion Air tickets.

ANALISIS FAKTOR WISATAWAN NUSANTARA MEMBELI TIKET PESAWAT KE BALI

The increasing number of airlines that provide flight routes to Bali, causes tourists to consider various factors before making the purchase of an airline ticket that would be used to go to Bali. This study aims to determine the factors that influence the decision of domestic tourists to purchase airline tickets to Bali with a quantitative descriptive approach. Data collected through observation, questionnaire distribution, and literature study. The sample in this study amounted to 100 tourists who were obtained accidentally. With the help of factor analysis using SPSS version 17, out of 26 indicators, six major factors were formed that influenced the behavior of domestic tourists in purchasing airline tickets to Bali, including: psychological factor, social factor, cultural factor, marketing mix factor, employment factor, and personal factor. The dominant factor that has influenced the behavior of domestic tourists in purchasing tickets is psychological factors with an eigenvalue of 14.135 and a variance percentage of 42.832%. As for forming psychological factors, airline image factors got the biggest loading factor which is a number of 0.881.

INOVASI SISTEMIK PEMBIAYAAN PERJALANAN UMRAH MELALUI AMITRA SYARIAH FINANCING (STUDI KASUS PT. WAKAFA ZAIN ABUL HUSNA)

Umrah travel package take costs that are not small because of influenced by the cost of airline tickets, star hotels and food and documents. Some people need a solution really realize their desire to carry out umrah. One solution offered by Amitra Syariah Financing in the form of financial bailout for prospective pilgrims when they are willing to have Umroh through PT. Wakain Zain Abul Husna. This innovation is a system that solves the financial problems of Muslims. This system innovation focused on the payment system, cooperation with Islamic banking, travel agents, customers, fatwa of National Sharia Board-Indonesian Council of Ulama (DSN-MUI) and other stakeholders and the system as a human creation. This system innovation raises pros and contras, will it be a way out of financial problems for Umrah or become a financial problem after having Umrah? The role of ethics in doing business occurs in this system innovation.

The implementation of Mamdani fuzzy inference system (FIS) method for decision making to choose direct and transit airline types in Indonesia

Choosing the type of airline tickets is determined by several factors, including types of direct or transit flights, ticket prices, facility and travel time. The purpose of this research is to determine the decision to purchase the direct and transit type airline tickets. In this research, the data were collected from Yogyakarta-Jakarta (Round Trip) amounted 93 and Yogyakarta-Medan (Round Trip) amounted 21 travel routes. This research used Mamdani fuzzy method with the following steps, determining the membership function of each input variable, determining the fire strength for each type of plane ticket, and determining Mamdani fuzzy inference system max-min. The results show that the highest electability for direct airline ticket types is Batik Air - Garuda (Round Trip) ticket type with the ticket price is IDR 1,501,200, facility score is 60 and travel time is around 140 minutes. While, the highest electability for transit tickets is Garuda - Garuda (Round Trip) with the ticket price is IDR 6,169,400, facility score is 60 and travel time is around 615 minutes.

Az ELEKTRONIKUS JEGYÉRTÉKESÍTÉS REGIONÁLIS KIHÍVÁSAI A MAGYAR VASÚTNÁL

Az internet elterjedésével, a kibertér tágulásával egyre fontosabb szerepet kap a javak és szolgáltatások elektronikus kereskedelme. Ebből a folyamatból a közösségi közlekedés sem maradhatott ki, mivel a szolgáltatók, akik időben ismerték fel a rendszer előnyeit, illetve megfelelő időben és módon alkalmazták azt, hatalmas előnyhöz juthattak versenytársaikkal szemben. Az Amerikai Egyesült Államokban az 1980-as évek elejétől vezették be először a légitársaságok az elektronikus kereskedelmi megoldásokat, mivel a verseny olyan erős volt, hogy a piaci szereplőknek minden eszközt meg kellett ragadniuk, hogy előnyhöz jussanak. Napjainkra a légitársaságok jegyeladásainak döntő többsége elektronikus úton történik. A vasúti közlekedésben is megjelentek az e-jegyek, amelyek európai elterjedésének kezdete a 2000-es évek elejére tehető. A vasút esetében új módszereket kellett kidolgozni, elsősorban az eltérő utazási szokások, a nyitott elérés stb. miatt. Természetesen ebben az esetben is legelőször a tőkeerős és nagy utasforgalmat lebonyolító vasúttársaságoknál, mint például a Deutsche Bahn-nál (DB), a Schweizerische Bundesbahnen-nál (SBB), illetve a Société Nationale des Chemins de Fer Français-nál (SNCF) vezették be. A magyar vasúti közlekedésben pár éves késéssel kezdték el alkalmazni az elektronikus kereskedelmi lehetőségeket. Ma már a jegyek és bérletek kevesebb, mint 60%-át értékesítik jegypénztárakban. 2018-as statisztikai adatok szerint egyre növekszik az alternatív (automata, internet, Vonatinfo) módon értékesített jegyek, bérletek száma. Tanulmányomban célom vizsgálni az elektronikus jegyértékesítő rendszer bevezetésének kihívásait és alkalmazásának tapasztalatait a MÁV-START Zrt-nél. Vizsgálatom során jellemzően szekunder adatokat, külföldi tudományos eredményeket, valamint a vállalat belső adatait használom fel.

An Approximation Algorithm for Network Revenue Management Under Nonstationary Arrivals

Many revenue management problems require making capacity control and pricing decisions for multiple products. The decisions for the different products interact because either the products use a common pool of resources or the customers choose and substitute among the products. When pricing airline tickets, for example, different itinerary products use the capacities on common flight legs and the customers choose and substitute among different itinerary products that serve the same origin-destination pair. Finding the optimal capacity control and pricing decisions in such problems can be challenging because one needs to simultaneously consider the capacities available to serve a large pool of products. In “An Approximation Algorithm for Network Revenue Management under Nonstationary Arrivals,” Ma, Rusmevichientong, Sumida, and Topaloglu develop efficient methods to make decisions with performance guarantees in high-dimensional capacity control and pricing problems.

Влияние цифровых технологий на управление бизнесом по продаже авиабилетов

The research objective was to study the effect of new technologies on service market using the case of airline ticket agencies. The study featured new marketing tools in the service sector and the effect of advanced technologies on the airline ticket market. Promotion instruments and methods are developing very fast. Nowadays, marketing relies on such concepts as cognitive marketing, cognitive technologies, behavioral marketing, SEO-promotion, and event-marketing. These approaches are different in nature but seek to satisfy and anticipate consumer expectations. Successful companies, e.g. Aeroflot and Sberbank, use effective combinations of these tools. A prompt adaptation to new technologies guarantees successful performance for small and medium-sized businesses. The research was based on such methods as observation, interview, scientific analysis, induction, and comparison. The empirical data were provided by the largest regional airline ticket agency. The authors used retrospective analysis of business documentation, interviewed the management, analyzed the client base, and conducted an express cost analysis. The research revealed both positive and negative consequences of digitalization. The airline ticket business proved to undergo serious changes during the digital transformation of the economy.

Are Malaysian airline passengers willing to pay to offset carbon emissions?

Recently, greenhouse gas (GHG) emissions become the hottest issue in the transportation sector. The air transport sector contributes approximately 2% of global greenhouse gas emissions. Reducing greenhouse gas emissions from aircraft is one of the issues taken seriously by the transportation sector. However, air transportation has implemented several ways to reduce carbon emissions, and one of them is by launching a carbon offset program. This study estimates the willingness among Malaysian airline passengers to pay for a carbon offset program to have a better environmental performance. Using a double-bounded dichotomous choice of contingent valuation method (CVM) estimates how much air passengers would be willing to pay to offset carbon emissions generated by their travel. The results obtained from this study suggest that the additional fee for airline tickets will be RM86.00 can be charged to have a better environmental performance.

The relationships of technology readiness, perceived value, satisfaction, and continuance intention – A study of self-service technologies in Viet Nam

Technologies have changed the way of doing business remarkably. The marketplace is being replaced by market space, where almost all products/services are embodied in digital forms and delivered through information-based channels. As a result, this study attempts to investigate the determinants of marketspace marketing, particularly of self-service technologies. More specifically, the study examines the relationships among technology readiness, perceived value, customer satisfaction, and continuance intention in using self-service technologies. Data was collected through a questionnaire survey on 179 users who have had experience in using self-service technologies (including internet banking, airline ticket online booking, and tours online booking) in Ho Chi Minh City –Vietnam’s largest city. Partial least squares structural equation modeling (PLS-SEM) was used to analyze the data. The results show that all of the six hypotheses were empirically supported. Specifically, (1) Technology readiness has a strong positive influence on perceived value, customer satisfaction, and continuance intention; (2) Perceived value shows a moderate positive impact on satisfaction and continuance intention; (3) Satisfaction has a significant positive impact on continuance intention. In terms of theoretical contributions, this study proposed a value-based framework to predict continuance intention and conceptualized technology readiness as a second-order formative construct, which better represents the content of the construct originally developed by Parasuraman (2000). In terms of managerial implications, marketing managers should pay special attention to TR when making decisions such as launching new SSTs, segmenting customers, or boosting customers’ TR.

Callable products with dependent demands

AbstractCapacity providers such as airlines often sell the same capacity to different market segments at different prices to improve their expected revenues. The absence of a secondary market, due to the nontransferability of airline tickets, gives rise to an opportunity for airlines to broker capacity between consumers with different willingness to pay. One way to broker capacity is by the introduction of callable products. The idea is similar to callable bonds where the issuer has the right, but not the obligation, to buy back the bonds at a certain price by a certain date. The idea of callable products was introduced before under the assumption that the fare‐class demands are all independent. The independent assumption becomes untenable when there is significant demand recovery (respectively, demand cannibalization) when lower fares are closed (respectively, opened). In this case, consumer choice behavior should be modeled explicitly to make meaningful decisions. In this paper, we consider a general consumer choice model and develop the optimal strategy for callable products. Our numerical study illustrates how callable products are win‐win‐win, for the capacity provider and for both high and low fare consumers. Our studies also identify conditions for callable products to result in significant improvements in expected revenues.