This paper seeks to investigate the rationality and the impacts of revenue management strategies in a competitive airline market. Its proposal is to generate inferences about their effects to the economic welfare of companies and consumers. In order to do this task, the Brazilian route Rio de Janeiro - Sao Paulo, was chosen, where those strategies were put in practice in 1998, following the initiative of the local aeronautic authority to expand fare liberalisation. The framework used to investigate this problem was a computer simulation model which reproduced 1998 market environment. The model was calibrated and validated using real data. The main conclusion achieved is that revenue management, contrary to common sense reasoning, had positive effects in relation to many important aspects of the market, such as an increase in load factors, an expansion in total quantities, a market power reduction and a decrease in some relevant consumer segments' disutility. It is inferred that the financial fragility phenomenon was generated because airlines did not develop adequately one of its main components, which is product differentiation - well-known as `fences' or `restriction bundles' - and thus much revenue dilution and profit losses were incurred. This leads to the conclusion that the process of strategy formation related to revenue management by Brazilian airlines might be in an immature stage yet. In the conclusion, the positive and negative aspects of computer simulation as a tool of investigation of competitive markets and industrial organisation phenomena are also discussed.
Abstract