Relationship between Airline Ticket Price, Demand and Business Model: A Worldwide Analysis

Abstract

The aim of this study is to reveal the relationship between the average price per passenger and the number of passenger of airlines. In the study, we analyzed the average price per passenger and number of passenger data of airlines for the period 2013-2022 using panel data analysis. We applied a panel regression model in the sample of all airlines. Therefore, we conducted the analysis using 4194 observations in the sample of all airlines. In addition, in the study, we divided the airlines into different groups according to their business model. In this context, we have classified airlines as Network carriers, Low-cost carriers, Charter carriers and Regional carriers. The findings of the study show that there is a reaction in the number of passengers against the change in the average price per passenger. The results of the analysis revealed that there is a significant and negative relationship between ticket price and airline demand but there are elasticity differences according to the business model.