A-La-Carte Pricing in the Airline Industry - Graduate Student ...

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A-La-Carte Pricing in the Airline Industry: Drivers, Consumer Effects, and Policy OptionsMercatus Policy EssayByGabriel OkolskiMaster of Arts, EconomicsGeorge Mason UniversityThe Mercatus Center at George Mason UniversitySummer 2010
Page 4: AcknowledgementsI wish to thank Jer
Page 9 and 10: Chapter 1: Background and Review of
Page 11 and 12: A number of terms relating to vario
Page 13 and 14: nearly all flights originate from o
Page 15 and 16: While the year of the bag fee may h
Page 17 and 18: would not be able to capture all co
Page 19 and 20: essentially sorts consumers into gr
Page 21 and 22: entrepreneurs to become alert to ne
Page 23 and 24: Furthermore, because the responses
Page 25 and 26: (such as food) than for checked bag
Page 27 and 28: Goetz, Andrew R. & Vowles, Timothy
Page 29 and 30: Chapter 2: Why, and Why Now? The Th
Page 31 and 32: amusement park‘s monopoly positio
Page 33 and 34: elationship: a flight that covers t
Page 35 and 36: ecouping additional revenues from t
Page 37 and 38: aggage fees—and looking for other
Page 39 and 40: Figure 2.1: U.S. Airlines Available
Page 41 and 42: participants are unable to reach a
Page 43 and 44: also during this time that Southwes
Page 45 and 46: comprehensible to consumers. Additi
Page 47 and 48: Interview data also indicate that n
Page 49 and 50: undertaken by the first mover. None
Page 51 and 52: made certain pricing mechanisms mor
Page 53 and 54:
Gale, Ian L. & Holmes, Thomas J. 19
Page 55 and 56:
Chapter 3: Airline Considerations f
Page 57 and 58:
evenue. Such an analysis is outside
Page 59 and 60:
to fly shorter routes where it comp
Page 61 and 62:
prices and willingness to pay for u
Page 63 and 64:
company. Two interviewees discussed
Page 65 and 66:
ecognized that increased cost-consc
Page 67 and 68:
In the neoclassical framework, comp
Page 69 and 70:
As certain airlines attempt to use
Page 71 and 72:
Chapter 3 ReferencesAirline Weekly.
Page 73 and 74:
Chapter 4: Consumer Response and We
Page 75 and 76:
load factors did start to rise abov
Page 77 and 78:
Figure 4.2: DOT Airline Complaints
Page 79 and 80:
enjoyed monopoly positions as the o
Page 81 and 82:
characterize this negative pressure
Page 83 and 84:
legacy airlines and AirTran Airways
Page 85 and 86:
Armstrong and Vickers (2010), whose
Page 87 and 88:
interviewee mentioned that fewer th
Page 89 and 90:
Changes in Product QualityWhile the
Page 91 and 92:
Figure 4.5: Plot of Mishandled Bagg
Page 93 and 94:
ecent congressional opposition to a
Page 95 and 96:
a way, airlines may move closer to
Page 97 and 98:
constrained by aircraft weight limi
Page 99 and 100:
Martin, Hugo. 2010. ―Spirit Airli
Page 101 and 102:
airline industry. First, they claim
Page 103 and 104:
It should be mentioned that Congres
Page 105 and 106:
Thus the travel necessity argument
Page 107 and 108:
not mandate some sort of quality st
Page 109 and 110:
If ancillary revenues did become ta
Page 111 and 112:
Thus, government applying a tax to
Page 113 and 114:
consumers with information about fe
Page 115 and 116:
flight(s) she wishes to purchase. I
Page 117 and 118:
While an information disclosure req
Page 119 and 120:
usiness to a no-fee carrier, provid
Page 121 and 122:
Gillen, David W., Morrison, William
Page 123 and 124:
ConclusionsThis paper has analyzed
Page 125:
as well as elucidate additional nua
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