Cost Pass-Through Mechanism in the Aviation Industry

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dc.contributorAalto Universityen
dc.contributorAalto-yliopistofi
dc.contributor.advisorKitti, Mitri
dc.contributor.authorJüngling, Patrik
dc.contributor.departmentTaloustieteen laitosfi
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.contributor.supervisorLiski, Matti
dc.date.accessioned2021-10-10T16:00:33Z
dc.date.available2021-10-10T16:00:33Z
dc.date.issued2021
dc.description.abstractKnowing the effect of cost changes for an airline on airfare is important for politicians and economists, as fuel taxing effects can be estimated more precisely. This thesis analyzes theoretical cost pass-through predictions within a contestable market and oligopoly markets. The following empirical part focuses on two questions: (1) what is the in-sample pass-through and (2) what are the main determinants of it? Lin and Gayle (2021) find that a 1% crude oil price increase is expected to cause a 0.065% decrease in ticket prices, mainly because of airline fuel hedging strategies and the market origin-destination distance. Shi et al. (2020) calculate that a 1% increase in fuel prices due to an airline’s hedging strategy is associated with a 0.66% increase in ticket prices.en
dc.format.extent4+27
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/110359
dc.identifier.urnURN:NBN:fi:aalto-202110109550
dc.language.isoenen
dc.programmeTaloustiedeen
dc.subject.keywordmicroeconomicsen
dc.subject.keywordcost pass-throughen
dc.subject.keywordaviation industryen
dc.subject.keywordfuel hedgingen
dc.titleCost Pass-Through Mechanism in the Aviation Industryen
dc.typeG1 Kandidaatintyöfi
dc.type.ontasotBachelor's thesisen
dc.type.ontasotKandidaatintyöfi
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