Peak-Load Pricing in Aviation: The Case of Charter Air Fares

Peak-Load Pricing in Aviation: The Case of Charter Air Fares

This paper examines how decisions on pricing and the allocation of capital inputs are determined in the market for charter air travel between the UK and Europe. Charter air fares exhibit a well defined peak-load structure and one which had responded flexibly to the constraints which have recently arisen in airport and airspace capacity. This suggests that the price mechanism is an effective instrument for resolving the allocation of peak capacity in aviation markets.

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