ASYMMETRIC PRICING AND AIRLINE PERFORMANCE
Open accessAbstract
We study the relation of asymmetric pricing with operating performance and stock returns of U.S. airlines. We construct two proxies to measure the degree of asymmetric pricing: Degree of Asymmetry (DOA) and Peer-adjusted DOA, and then simultaneously test how the direction and magnitude of asymmetric pricing affect airline performance. We find that raising air ticket price, regardless of whether the fuel cost is increasing or decreasing, is associated with significantly higher sales growth and stock returns than reducing price in the same scenario. However, raising price above industry peers is two-edged: it may increase profit margin, but at the cost of a slowdown in sales growth.
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Airlines typically raise prices during cost increases faster than they lower prices during cost reductions.
“Airlines typically raise prices during cost increases faster than they lower prices during cost reductions, exemplifying this asymmetry (Escobari, 2013; Jiang and Que, 2022).”
From Passenger and Freight Demand under Macroeconomic Volatility: Evidence from South Korea and The United States (2026) · cites this paper as Jiang and Que, 2022
The Introduction (page not available) describes firms generally as raising prices quickly when costs rise but being reluctant to lower them when costs fall. The paper studies asymmetric pricing among U.S. airlines, but the cited passages do not establish that airlines typically raise fares faster than they lower them; its reported results concern how pricing choices relate to airline performance. (LLM, conf=0.82)
Experimental — accuracy not yet measuredThe COVID-19 pandemic drastically impacted global tourism demand, with global travel restrictions causing a sharp decline in air passenger volumes and international tourist arrivals.
“The COVID-19 pandemic drastically impacted global tourism demand, with global travel restrictions causing a sharp decline in air passenger volumes and international tourist arrivals (Suk and Kim, 2021; Jiang and Que, 2022).”
From Passenger and Freight Demand under Macroeconomic Volatility: Evidence from South Korea and The United States (2026) · cites this paper as Jiang and Que, 2022
The Methods section (2.2.1) describes airline ticket data from 2001–2016, while section 3.3 examines pricing and stock returns. Searches for COVID-19, travel restrictions, tourism demand, passenger-volume declines, and international tourist arrivals found no passage in our copy addressing the claim. (LLM, conf=0.77)
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Cites
Anticompetitive Effects of Common Ownership
AZAR, J., SCHMALZ, M. C., & TECU, I. (2018) · The Journal of Finance · doi:10.1111/jofi.12698 · Cited by 980 · see citing works
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Cited by
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Jung, N. (2026) · Transport and Telecommunication Journal · doi:10.2478/ttj-2026-0011 · Cited by 1 · see citing works
- Authors
- Jiang, Y., & Que, T.
- Affiliations
- California State University, Fullerton (US)
- University of Alabama in Huntsville (US)
- Venue
- Applied Finance Letters
- Published
- 2022-10-03
- Volume
- 11
- Pages
- 9-18
- ISSN
- 2253-5799 (ISSN-L)
- 2253-5802
- OpenAlex
- W4318600824
- Cited by
- 1
- References
- 1
- Citations by year
- 2026: 1
- FWCI
- 0.00
- Type
- journal article
- Language
- en
- Open access
- diamond
- dx.doi.org
- Licence
- Locations
- Applied Finance Letters (publishedVersion, cc-by-nc-nd)
- DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion, cc-by-sa)
- Tuwhera (Auckland University of Technology) (submittedVersion, cc-by-nc-nd)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Aviation Industry Analysis and Trends
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
- Keywords
- asymmetric price adjustment, airline industry, fuel costs, operational performance, stock returns, sales growth, profit margin, peer comparison
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