AIRLINE FARES: A COMPARISON BETWEEN SPANISH AND FRENCH TRAVEL AGENCIES

Abstract

The existence of different types of intermediaries - e-tailers, traditional or offline retailers and multichannel retailers - engaged in the sale of airline tickets has enabled consumers to find different prices if they spend time searching for information. This has prompted internet marketing research to increasingly focus on the issue of pricing, analyzing the differences between these retailers with respects to price levels, price dispersion, pricing strategies, etc. Moreover, there are also studies examining the effects of culture on prices. However, there is no literature on the effects of the culture from the supplier point of view. This paper attempts to fill in the gap by studying whether the geographical locations of the travel agencies affect airline ticket prices. In particular, the study compares the price behavior of French and Spanish intermediaries operating exclusively online and those operating simultaneously in travel agencies and on the internet (offline and online). To this end, we consider three routes that connect Madrid, Paris and New York, with data starting four months prior to the departure date (December 16, 2013). The results show several differences in the price levels and price dispersion between intermediaries in relation to the type of retailer and their geographical locations.