Determinants of Ticket Prices in Turkish Aviation Industry

Authors : Ceyhun Elgin, Orhan Erem Ateşağaoğlu, Oğuz Öztunali

Pages : 329-338

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Publication Date : 2017-10-31

Article Type : Research

Abstract :In this paper, we investigate the determinants of ticket prices in the Turkish aviation sector by mainly focusing on the role of competition using both cross-sectional and panel data approaches. Our results indicate that while the main determinant  of the cross-sectional variation in average ticket prices is the distance of route; the degree of competition, flight frequency and plane capacity have statistically significant relationships with daily ticket prices alongside the distance. However, the set of determinants depend on the location of flight destination. For routes with a domestic destination, our results indicate that price levels are negatively affected from the degree of competition, exchange rate and crude oil price. On the other hand, ticket prices for routes with international destinations are negatively and significantly relate to flight frequency and plane capacity while the degree of competition does not exhibit a statistically significant relationship.
Keywords : Aviation Industry, Ticket Prices, Panel Data