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

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. [ FROM AUTHOR] Copyright of Transportmetrica B Transport Dynamics is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)