Work detail

The Key Determinants of Plane Ticket Price Dispersion

Author: Bc. Radka Vlčková
Year: 2017 - summer
Leaders: Mgr. Ing. Adam Kučera
Consultants:
Work type: Bachelors
Language: English
Pages: 55
Awards and prizes:
Link: https://is.cuni.cz/webapps/zzp/detail/185477/
Abstract: This thesis examines the plane tickets price development using both descriptive evidence
and econometric analysis. The observed phenomenon of rising and falling fares in period
close to departure is described and compared with the extensively developed theories,
such as demand utilization and stochastic peak load pricing. Studying the fares observed
on European routes using descriptive evidence revealed that the airlines accommodate
fast to the uncertain demand. In the econometric part, the key factors influencing the price
dispersion are determined. The contribution of this thesis is mainly in the econometric
approach, as the price fluctuations are measured weekly using the coefficient of variation.
This made it possible to compare how the different flight or market characteristics affect
price dispersion in different week to departure. It was shown that number of sold seats,
the load factor, is the crucial factor.

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