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By Stuart Cole

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Example text

However, the extension of networks by airlines such as easyJet has led to a loss of business travellers who take advantage of the lack of inhibitors (eg Saturday night away) imposed by the traditional carriers. These have reacted by removing such inhibitors or by reducing their fares for early booking by 50 per cent or more. 8). 8 shows, the impact of transatlantic traffic and internal United States air travel has its effects on both traditional (eg United) and ‘no frills’ (eg South West) airlines but generally for non-price reasons.

12). Most leisure travel is very competitive with a high elasticity, but the summer family traveller on a holiday to the sun will find all operators offering the same price pattern (TB, 2003; JR, 2003). They have to travel when the schools are closed, and demand is likely to be more inelastic. Both these elements are taken into account by travel operators when pricing their holidays. This form of price discrimination is dealt with in more detail in Chapter 4. Load factor variations are important in determining the profitability of airline operations.

Concessionary fares (eg free travel for over 60s, students, disabled) may increase demand on a one-off basis following their introduction. This suggests an own price elasticity or cross-price elasticity effect from the motor car. However, this revenue increase has also provided a business case for higher frequency and newer vehicles. This is a combination of price and service elasticity. 0 Source: National Assembly for Wales The national concessionary fares scheme had increased bus journeys across Wales by 5% from 104 million to 109 million per annum.

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