Airlines Competing with Themselves : A Note on the Temporal Pattern of Fare Setting Prior to Departure

Abstract

This paper looks at temporal fare discrimination used by airlines at the point of departure. The research posits that such fare discrimination is a by-product of service competition within the same carrier (e.g. a flight between A and B at 8:00 a. m. compared with a 9:00 a.m. flight between A and B by the same carrier). An empirical analysis of fares data within United States carriers is used. Results suggest that the multi-service airline neither sees its service offerings as internal competitors nor actively uses its multi-service offering advantage to compete with rivals.