Price Differentiation in Domestic Market of Air Passenger Travel in Russia

Andrey Kaukin – Head of Department for System Analysis of Sectoral Markets, Institute for Applied Economic Studies, Russian Presidential Academy of National Economy and Public Administration; Head of Sectoral Markets and Infrastructure Department of the Gaidar Institute, Candidate of Economic Sciences. Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Eugenia Filicheva – Research fellow of Department for System Analysis of Sectoral Markets, Institute for Applied Economic Studies, Russian Presidential Academy of National Economy and Public Administration. Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Air messenger market in economies with market pricing on goods and services is characterized by marked differentiation of air ticket prices. In theoretical and empirical research price differentiation, as a rule, is explained by variation of costs incurred by a firm or by price discrimination. The aim of this paper is to determine the scale and factors, which specify price differentiation on domestic air service. One of key tasks is to provide an answer to whether heterogeneity of prices represents abuse by air travel companies of their power of a result of variation of their costs.

Key words: price, competition, price discrimination, air transport.