The Uses of the "Temporal-Fares-Offered Curve" in Air Transportation

Abstract

The increasing use of Internet booking facilities provides analysts with a rich data source of the profile of airline fares offered for a particular service as the time of departure approaches – "temporal-fares-offered curves." This paper offers a critical assessment of this form of analysis. It also reviews the empirical work that has been done using this type of data and synthesizes the information and insights that it can provide on the operations of an airline market. The subjects covered range from pricing strategies of low-cost and legacy carriers under different degrees of competition, to the extent to which there is price leadership in markets, and to ways in which airlines determine fares-offered when their schedules mean that their own services effectively compete with each other.