Competition in airline pricing : Thailand domestic market

Name: Daungsamorn Kumrai

keyword: Airline industry

LCSH: Airlines -- Thailand

; Price behavior

LCSH: Prices -- Mathematical models

; Vector error correction model (VECM)

; Cointegration

Abstract: This study focuses on the competition in Thailand domestic market. We analyze airline dynamic pricing behavior in both full-service and low cost carriers, and interaction of airline pricing in both short-run and long-run relationship by using Vector Error Correction Model (VECM). Data on airfares is created. We collected daily airfares from the internet, daily offer prices starting from 60 days up to one day prior departure dates with 9 domestic routes during 2 departure dates which represent to peak- and offpeak- periods. Then we use market characteristics as the criterion to separate markets into high concentration markets and low concentration market. And focus only these 3 markets which are Chiangmai, Phuket, and Chiangrai. The empirical results found that price of Thai Airways with selected airways and oil price will achieve long run relationship in high concentration markets. Cointegrating relations are found positive relationship to oil price and LCCs which are consistent with assumptions and previous studies. Relationship between prices in short run can’t defined. However when any price variables aren’t changing, price of Thai Airways still change follow its trend that consistent with airline pricing strategy, price will increase as departure date approach, demand changing and limited capacity. In addition the model allow to investigate the reaction of Thai Airways pricing to shock for example, oil shock and airfare promotion, the relationships confirm cointegrating relationship

Thammasat University. Thammasat University Library

Address: BANGKOK

Email: preserv@tu.ac.th

Name: Pornthep Benyaapikul

Role: advisor

Created: 2016

Modified: 2564-05-21

Issued: 2021-05-21

วิทยานิพนธ์/Thesis

application/pdf

DOI: 10.14457/TU.the.2016.623

eng

DegreeName: Master of Economics

Level: Master's Degree

Descipline: Economics

Grantor: Thammasat University

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