Description 

This assignment provides insight into Internet distribution and the workings of Revenue Management. It’s also a chance to complete a small (very small) research project. The project includes these steps:

1. Provide the context for the study. The research question and hypothesis should flow from your understanding of airline industry competition and pricing. Explain the situation chosen and place the research question within this context.
2. Develop a research question and hypothesis about airline pricing. Several research questions are listed below and you may choose one of these or develop one of your own. The research question must be one that can be answered by collecting pricing data. The hypothesis is your specific prediction that the data will confirm or refute. This prediction will usually be based on the airline’s price response to competition and the operation of revenue management systems.
3. Next explain how you will answer your question(what markets are chosen, what are the dates of travel, what is the means of finding the price data).
4. Then conduct the researchand obtain ticket prices and present your data (ticket prices). Pricing data is often best presented in a table.
5. Finally, draw conclusions. Explain whether the hypothesis was supported or rejected. In your conclusions, you should speculate (hypothesize) about the market forces and reasons for your findings employing concepts from the course. Those involved in the Graduate Capstone Project will recognize this process. It’s the basic format for all research.

The instructions below are also available as a document you can download:

 

In order to answer your question with statistical significance, you’d need more price data than this assignment requires. For example, based on prices in the one market you choose, you might reach a conclusion that wouldn’t be supported had you had a larger sample. This assignment, however, does not require a large sample. Pricing from one or two markets is sufficient. Depending on the question you choose, you may find ticket prices from one or more of the Internet portals (Travelocity, Expedia, Cheap Tickets, Orbitz, Priceline, etc.) and/or directly from airline websites. There’s no need to call an airline or travel agent.

Possible research questions:

1. What’s the difference in yield for travel between large cities as opposed to small cities?
2. Where global network carriers compete with LCCs are fares of the two carriers competitive (Delta – Air Tran, Southwest-American, British Airways – Ryanair, etc.)?
3. In cities where LCCs compete (Southwest and JetBlue), is yield lower than where the LCC competes with a legacy carrier?
4. Has Southwest’s entry into the major metropolitan airports down fares (DEN, MSP, BOS, and LGA)?
5. Compare Frontier’s fares in markets of similar distances where it does and does not complete with Southwest.
6. Does JetBlue enjoy higher yields from New York Kennedy than from Newark or LaGuardia?
7. How do Ryanair and EasyJet prices compare?
8. Do airlines serving secondary airports in large cities offer lower fares than those serving the primary airports?
9. Do fares differ based on the directional of travel? Do the prices for flights from a fortress hub differ from those to the hub?
10. Do round trip tickets in a city-pair differ by the direction of travel (which city is the origin)?

There are many more, but hopefully this provides an idea. Even if two students choose the same question from the list above, the research will differ because the markets chosen for the test should be different.

In practice for the Capstone Project or future research, you may wish to organize your paper under the following or similar headings:
The first few paragraphs will introduce the paper: What airlines, routes, and prices are you researching? Provide a brief background of the subject. This section should also provide the foundation for the research question and hypothesis(es).

Research Question

What question(s) are you seeking to answer?

Hypothesis

What specific results do you expect and why? This prediction is made prior to conducting the research based on your understanding of airline pricing methodology. The data will either support or refute your prediction. Either outcome is acceptable as long as it allows for meaningful conclusions.

Methodology

How was the data collected? From what sources, for what dates, times, etc?

Data

Present your findings. Tables or graphs are often effective. Data should be summarized so the relevance to the hypothesis is apparent. Do not just present the raw data. Raw data can be provided in an appendix.

Conclusion

What does your data show? Does it support your hypothesis? What conclusions do you draw?

This assignment should be challenging, fun, and useful in preparing for your capstone project.

Format

The paper should be in current APA style and not more than four pages in length excluding title page, references, and any appendices you may wish to add. The following APA style elements should be included: title page, page numbers, headings, citation, and reference listing for source documents.

Your Internet Price Research project is a small (very small) research project that provides insight into Internet distribution and the workings of Revenue Management. It is the fourth of five written assignments for this course and it is due by the end of this module. The paper is worth 10% of your course grade.