The Impact of Frequent Flier Programs on Ticket Fares in the Norwegian Domestic Airline Market using a Multiple Linear Regression Model
MetadataShow full item record
I investigate how the presence of frequent flyer programs (FFP), in addition to other micro- and macroeconomic variables, influence the ticket fare prices in the Norwegian domestic airline market. The period of investigation, 2007 - 2017, covers a natural experiment with and without a market ban of frequent flyer programs in Norway.The raw data obtained are processed using linear interpolation, arima seasonal adjustments and adjusted for inflation to be useable in a multiple regression analysis. Seven different models are used to test the statistical sensitivity and validity of the multiple linear regression models. The results induce that the introduction of FFP seem to influence prices negatively, in contrast to the findings in most of the existing literature. FFP shows influence with a lower magnitude than the cost indices and the financial crisis dummy variable.