Discussion On Airline Pricing In This Module

73 Discussion Airline Pricingin This Module We Learned About Price

Discuss how successful airlines acknowledge different pricing strategies as they relate to the airline's overall business strategy. Provide an example(s). If possible exclude Southwest airlines in your discussion. Discuss how successful airlines control the use of discount fares by imposing and enforcing appropriate conditions on these fares, and how they utilize state-of-the art revenue management systems. Provide an example(s). 200 words Use; Armstrong, G., & Kotler, P. (2014). Principles of Marketing. (15th ed.) Upper Saddle River, NJ, Pearson Education Inc.

Paper For Above instruction

Airlines employ a diverse array of pricing strategies to align with their overarching business objectives and maximize revenue. Successful airlines recognize that dynamic pricing—adjusting fares based on demand, competition, and booking patterns—is crucial in capturing consumer surplus and enhancing profitability. For example, many airlines adopt "fare classes" that cater to different customer segments, such as premium, business, and economy travelers, each priced according to their willingness to pay. This segmentation allows airlines to optimize load factors across their fleet (Armstrong & Kotler, 2014). Excluding Southwest Airlines, which primarily uses a single fare class, other carriers like Delta and American Airlines implement flexible fare structures, dynamically adjusting prices using sophisticated revenue management systems.

To control discount fares, airlines impose conditions such as non-refundable tickets, minimum stay requirements, or advanced purchase restrictions. These conditions prevent fare abuse and ensure that discount offerings serve targeted demand periods without cannibalizing full-fare sales. Furthermore, airlines utilize advanced revenue management systems—like PROS Revenue Management Software—that analyze booking data in real time, forecast demand, and optimize fare offerings dynamically. For example, Delta's use of such systems enables it to allocate seats efficiently between high-paying and discounted passengers, maximizing revenues while controlling discounts to maintain profitability (Kimes, 2011). This strategic pricing and control exemplify how airlines maintain competitive advantage through targeted fare policies and cutting-edge revenue management technology.

References

• Armstrong, G., & Kotler, P. (2014). Principles of Marketing (15th ed.). Pearson Education Inc.
• Kimes, S. E. (2011). The Future of Revenue Management. Journal of Revenue and Pricing Management, 10(3), 250-259.
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