Description
We analyse the pricing policy adopted by Ryanair, the main low-cost carrier in Europe. Based on a year’s
fare data for all of Ryanair’s European flights, using a family of hyperbolic price functions, the optimal
pricing curve for each route is estimated. The analysis shows a positive correlation between the average
fare for each route and its length, the frequency of flights operating on that route, and the percentage of
fully booked flights. As the share of seats offered by the carrier at the departure and destination airports
increases, fares tend to decrease. The correlation of dynamic pricing to route length and the frequency of
flights is negative. Conversely, as competition increases discounts on advance fares rise.
doc_521720795.pdf
We analyse the pricing policy adopted by Ryanair, the main low-cost carrier in Europe. Based on a year’s
fare data for all of Ryanair’s European flights, using a family of hyperbolic price functions, the optimal
pricing curve for each route is estimated. The analysis shows a positive correlation between the average
fare for each route and its length, the frequency of flights operating on that route, and the percentage of
fully booked flights. As the share of seats offered by the carrier at the departure and destination airports
increases, fares tend to decrease. The correlation of dynamic pricing to route length and the frequency of
flights is negative. Conversely, as competition increases discounts on advance fares rise.
doc_521720795.pdf