Modeling of United States Airline Fares Using the Official Airline Guide (OAG) and Airline Origin and Destination Survey (DB1B) (2006)

Author: Krishna Rama-Murthy

Prediction of airline fares within the United States including Alaska & Hawaii is required for transportation mode choice modeling in impact analysis of new modes such as NASA's Small Airplane Transportation System (SATS). Developing an aggregate cost model i.e. a 'generic fare model' of the disaggregated airline fares is required to measure the cost of air travel. In this thesis, the ratio of average fare to distance i.e. fare per mile and average fare is used as a measure of this cost model. The thesis initially determines the Fare Class categories to be used for Coach and Business class for the analysis .The thesis then develops a series of 'generic fare models' using round trip distance traveled as an independent variable. The thesis also develops a set of models to estimate average fare for any origin and destination pair in the US. The factors considered by these models are: the round trip distance traveled between the origin (o) and destination (d), the type of fare class chosen by the traveler (first, business class and unrestricted coach class and restricted coach class), the type of airport (large hub, medium hub, small hub, or non hub), whether or not the route is served by a low cost airline and the airline market concentration between the o-d pair. The models suggest that competition at the destination airport is more critical than the competition at origin airport for coach class fares and vice a versa for business class fares. Models suggested in this thesis predict air fares with R-square values of 0.3 to 0.75.

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