Optimal Marketing Strategy for Two Parallel Flights Competitive with Strategic Passengers

Chunyang CHEN1*, Hao LI2, Xiang GAO2

1School of Traffic and Transportation, Chongqing Jiaotong University, Chongqing, 400074, China

2School of Economics and Management, Chongqing Jiaotong University, Chongqing, 400074, China

Abstract: A case study is done on two competing airline companies operating the same airline. This paper

analyzes the sales strategy of airline ticket in competitive market. Based on strategic behavior, we established a two parallel flights competition game model, and discussed the effect of various factors on expected revenue. Then analyzed the impact of the purchase preferences on airline revenue. The results show that the market has only normal sales period and the ticket price is inequality for different purchase preferences. We also find that when the two airline companies are local monopolies, the part-covered sale strategy slightly outperforms the whole-covered sale strategy.

Keywords: Transportation economy; Strategic passenger behavior; Game; Competition