DEMAND ELASTICITY OF AIR ROUTE ZAGREB-DUBROVNIK-ZAGREB

undergraduate thesis

• Author: Ivan Jajić
• Mentor: Tomislav Herceg (mentor)
• Granter: University of Zagreb; Faculty of Economics and Business; (Department of Managerial Economics); Zagreb
• Defense date and country: 2016-07-08, Croatia
• Scientific / art field, discipline and subdiscipline: SOCIAL SCIENCES; Economics; Economics of Entrepreneurship

Abstract

The results of adding temperature as another factor compared to price and quantity
relationship analysis has shown different results of the demand elasticity in the market.
According to the empirical analysis of price/quantity relationship, an increase in the price
would have made a decrease in the demand by 57% or 34% (Summer 2014) 13depending on
the percentage of the price increase (10%, 5%). On the other hand, when entering another
factor like temperature in the analysis, results change.
Temperature analysis has showed different results in terms of possible revenue gained and
present demand on the route. As previously said, if the price increases for 1 EUR, there is
going to be a decrease in the passengers demand, but if the temperature increases by 1°C that
demand will increase by the same amount it dropped due to the price increase. Furthermore,
if we look it from the total revenue perspective, Croatia Airlines should decrease the number
of flights and increase the ticket price in order to earn more revenue on the route. From total
average number of passengers that stands at 446,7 (Summer 2015), according to the
temperature analysis, company should decrease the number of passengers to 335 and increase
the average ticket price to 119,56 EUR to maximise the revenue.

• Keywords: demand elasticy; air transport industry; Croatia Airlines; price/quantity relationship
• Language: english
• URN:NBN: urn:nbn:hr:148:158238
• Study programme: Title: Business Economics in English; Study programme type: university; Study level: undergraduate; Academic / professional title: sveučilišni/a prvostupnik/ prvostupnica(baccalaureus/ baccalaurea) ekonomije (sveučilišni/a prvostupnik/ prvostupnica(baccalaureus/ baccalaurea) ekonomije)
• Type of resource: Text
• File origin: Born digital
• Access conditions: Access restricted to students and staff of home institution
• Public note: Sažetak preuzet iz zaključka rada. Ključne riječi dodijelio knjižničar.
• Created on: 2016-07-19 10:35:19