‘Wild Your weekends' promotion and its effect on traffic recovery during COVID-19 pandemic

Linfeng Zhang; Hangjun Yang; Kun Wang; Lei Bian; Anming Zhang

doi:10.1080/21680566.2022.2034550

‘Wild Your weekends' promotion and its effect on traffic recovery during COVID-19 pandemic

Linfeng Zhang, Hangjun Yang, Kun Wang, Lei Bian, Anming Zhang

Research output: Journal article publication › Journal article › Academic research › peer-review

6 Citations (Scopus)

Abstract

China Eastern Airlines launched a ‘Wild Your Weekends' programme offering buyers an unlimited number of free trips during weekends, which is unprecedented in the Chinese airline market and also rare around the world. However, it is unclear whether such a promotion is effective in improving airlines’ liquidity. This study adopts the difference-in-differences (DID) method to empirically examine the impacts of this promotion programme on traffic volumes, ticket prices and revenues of China Eastern and its competitors. Our estimations suggest that this programme has overall helped China Eastern improve its liquidity. On one hand, the carrier was forced to lower prices on weekends, probably because passengers formed strong beliefs on China Eastern’s low price due to its promotion programme, and felt psychologically unfair by paying high prices as compared to the programme’s users. This decreased China Eastern’s revenue from non-programme passengers on weekends.

Original language	English
Pages (from-to)	1206-1224
Number of pages	19
Journal	Transportmetrica B
Volume	10
Issue number	1
DOIs	https://doi.org/10.1080/21680566.2022.2034550
Publication status	Published - 31 Dec 2022
Externally published	Yes

Keywords

airline liquidity
COVID-19
difference-in-differences (DID)
price promotion

ASJC Scopus subject areas

Software
Modelling and Simulation
Transportation

More information

10.1080/21680566.2022.2034550

Cite this

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title = "{\textquoteleft}Wild Your weekends' promotion and its effect on traffic recovery during COVID-19 pandemic",

abstract = "China Eastern Airlines launched a {\textquoteleft}Wild Your Weekends' programme offering buyers an unlimited number of free trips during weekends, which is unprecedented in the Chinese airline market and also rare around the world. However, it is unclear whether such a promotion is effective in improving airlines{\textquoteright} liquidity. This study adopts the difference-in-differences (DID) method to empirically examine the impacts of this promotion programme on traffic volumes, ticket prices and revenues of China Eastern and its competitors. Our estimations suggest that this programme has overall helped China Eastern improve its liquidity. On one hand, the carrier was forced to lower prices on weekends, probably because passengers formed strong beliefs on China Eastern{\textquoteright}s low price due to its promotion programme, and felt psychologically unfair by paying high prices as compared to the programme{\textquoteright}s users. This decreased China Eastern{\textquoteright}s revenue from non-programme passengers on weekends.",

keywords = "airline liquidity, COVID-19, difference-in-differences (DID), price promotion",

author = "Linfeng Zhang and Hangjun Yang and Kun Wang and Lei Bian and Anming Zhang",

note = "Funding Information: Financial supports from National Natural Science Foundation of China research fund (71901065) and the Program for Young Excellent Talents (19YQ01) of University of International Business and Economics are highly appreciated. Publisher Copyright: {\textcopyright} 2022 Hong Kong Society for Transportation Studies Limited.",

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AU - Zhang, Linfeng

AU - Yang, Hangjun

AU - Wang, Kun

AU - Bian, Lei

AU - Zhang, Anming

N1 - Funding Information: Financial supports from National Natural Science Foundation of China research fund (71901065) and the Program for Young Excellent Talents (19YQ01) of University of International Business and Economics are highly appreciated. Publisher Copyright: © 2022 Hong Kong Society for Transportation Studies Limited.

PY - 2022/12/31

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N2 - China Eastern Airlines launched a ‘Wild Your Weekends' programme offering buyers an unlimited number of free trips during weekends, which is unprecedented in the Chinese airline market and also rare around the world. However, it is unclear whether such a promotion is effective in improving airlines’ liquidity. This study adopts the difference-in-differences (DID) method to empirically examine the impacts of this promotion programme on traffic volumes, ticket prices and revenues of China Eastern and its competitors. Our estimations suggest that this programme has overall helped China Eastern improve its liquidity. On one hand, the carrier was forced to lower prices on weekends, probably because passengers formed strong beliefs on China Eastern’s low price due to its promotion programme, and felt psychologically unfair by paying high prices as compared to the programme’s users. This decreased China Eastern’s revenue from non-programme passengers on weekends.

AB - China Eastern Airlines launched a ‘Wild Your Weekends' programme offering buyers an unlimited number of free trips during weekends, which is unprecedented in the Chinese airline market and also rare around the world. However, it is unclear whether such a promotion is effective in improving airlines’ liquidity. This study adopts the difference-in-differences (DID) method to empirically examine the impacts of this promotion programme on traffic volumes, ticket prices and revenues of China Eastern and its competitors. Our estimations suggest that this programme has overall helped China Eastern improve its liquidity. On one hand, the carrier was forced to lower prices on weekends, probably because passengers formed strong beliefs on China Eastern’s low price due to its promotion programme, and felt psychologically unfair by paying high prices as compared to the programme’s users. This decreased China Eastern’s revenue from non-programme passengers on weekends.

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‘Wild Your weekends' promotion and its effect on traffic recovery during COVID-19 pandemic

Abstract

Keywords

ASJC Scopus subject areas

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