The pricing performance of Pegasus Airlines on European routes after new competitor enters the market

The aviation sector in Turkey has been developing with each passing day an increasing growth rate in 2017-2018 was 8.8%. The increase in the number of alternative new destinations and the number of frequencies in the existing flight routes means product diversity for the passengers and competition for the companies. Increasing product variety and competitive environment are very important considering the profitability of the companies. With the profitability, the implementation of different pricing strategies is becoming more and more important day by day in order for companies to increase their market shares and become a leader in the sector. In this regard, in order to get the best results, revenue management pricing method is applied for avaition industry. Revenue management is defined as selling the right seat at the right price to the right customer, and the basis is the demand and the classification of the market. Although Atatürk and Sabiha Gökçen airports are located within the provincial borders of Istanbul, the passenger profiles they address are considered as two separate markets as they differ. Pegasus Airlines from Sabiha Gökçen airport has been operating international flights since 2008, and Turkish Airlines entered this market as of March 2013. The competition environment has increased with the introduction of new competitors. By the depend on the increasing of competition in the market changes on the ticket fares of the Pegasus Airlines has been observed. The aim of this study is to analyze the price changes of Pegasus Airlines after the new competitor which is Turkish Airlines enters the market in many aspects. These are competitor fares effects on pricing, corrrelation between competitor fares and Euro and Turkish exchange parameters. The statistical changes on the ticket prices and the correlation relation with parameters had been analyzed with through the SPSS and Stata software program by applying T-test and Panel data Regression methodologies. In this study, STR and BCN has been chosen from the European routes, where international flight demand was highly demanded. The fare data for 2015, 2016, 2017 for July flights, which is the most intense demand for Stuttgart (STR) with ethnic passenger profile and Barcelona (BCN) with tourist passenger profile, has been used. Key Words: Pegasus Airlines, Revenue Management, Pricing, Competition