SlideShare a Scribd company logo
1 of 25
Download to read offline
AFFILIATED WITH
Airfare pricing process & strategies
Airfare pricing process & strategies
Airfare pricing process & strategies
Airfare pricing process & strategies
Airfare pricing process & strategies
Airfare pricing process & strategies
• Responsibility of Airline Price Analyst
• ATPCO
Airfare pricing process & strategies
Airfare pricing process & strategies
Airfare pricing process & strategies
Pricing tactics can be broadly categorized as: 
(1) Fare actions and, 
(2) Adjustments to fare rules and/or restrictions. 
Normally, daily pricing activity involves both 
tactics.
Fare actions involve changes—increases or 
reductions — to actual fare levels, in contrast to 
the rules, restrictions, and/or footnotes that 
accompany most fares. 
Changes can be market specific, regional, or 
mass market in scope.
Introductory fares. When a carrier begins 
service in a new market, it typically offers 
unrestricted low fare – also called Market 
penetration pricing 
System excursion-fare. During seasonally weak 
traffic periods, carriers frequently offer a system 
wide sale of excursion fares. (7 to 10 days)
• System business-fare sales. 
• Connect market sales. 
• Target segment pricing. 
• Flight-time-specific. 
• Mileage-based pricing. 
• Zone pricing. 
• Value-added pricing.
Adjusting Rules and Restrictions. This 
second set of tactics involves the periodic 
adjustment of rules and restrictions that 
accompany most fares rather than the dollar 
amount of the fares.
Common rules and restrictions tactics include 
the following: 
• Advance purchase requirements. 
• One-way versus round-trip purchase. 
• Minimum or maximum stays. 
• Fare penalties. 
• Directional pricing. 
• Peak and off-peak pricing. 
• Sales, ticketing, and travel windows.
The decision to use any one, or a 
combination, of the tactics is essentially a 
decision to raise or lower a fare. For 
example, increasing the advance purchase 
restriction from 3 to 7 days on a 
discounted business fare will force a 
certain number of passengers to buy the 
next higher fare.
1. Subtract dilution. Dilution results from those 
passengers willing to pay full fare. 
2. Subtract refunds. Airlines normally obligate 
themselves through the so-called 
guarantees to pay back. 
3. Subtract advertising. To the extent that 
previously unbudgeted funds are catered. 
4. Subtract additional variable passenger costs. 
Traffic liability insurance, food, and reservations 
fees are the expenses
5. Add spill. When a newly introduced fare is 
especially low and is matched by all 
major competitors in the market, it has the 
potential to stimulate primary demand. 
6. Add rejected demand by other airlines. At 
times, certain airlines will tightly restrict the 
number of seats sold at a particular discounted 
fare.
Steps in Analyzing a Fare Increase. In the 
case of a fare increase, there are fewer factors 
to consider in estimating the net economic 
impact. 
The formula becomes simply: revenue 
gain or loss from elasticity plus passenger 
variable costs avoided. With the introduction 
of a fare increase, spin and rejected demand 
are irrelevant. Likewise, there is no potential
The objective of inventory management is to 
maximize individual flight revenue. In the 
simplest terms, inventory analysts face the task of 
selling as many seats as possible at the highest 
possible fares. This usually means making available an 
adequate number of lower-fare seats far in advance of 
the departure date in order to accommodate price-sensitive 
business travelers. It’s a tricky balancing act 
that requires a keen understanding of the competitive 
dynamics and traffic composition of individual markets 
and flights.
Pricing Behavior and Non-price Characteristics in 
the Airline Industry (Advances in Airline 
Economics) by James Peoples 
The Future of Pricing: How Airline Ticket Pricing Has 
Inspired a Revolution by E. Andrew Boyd 
Air Transport by John Wensveen
Airfare pricing process & strategies

More Related Content

What's hot

Yield management in the airline industry
Yield management in the airline industry Yield management in the airline industry
Yield management in the airline industry TTS
 
Aviation terminology by Kalyan S Patil
Aviation terminology by Kalyan S PatilAviation terminology by Kalyan S Patil
Aviation terminology by Kalyan S PatilKalyan S Patil
 
Airline Cost Route Profitability System
Airline Cost  Route Profitability SystemAirline Cost  Route Profitability System
Airline Cost Route Profitability Systemsamissac
 
Revenue management overview
Revenue management overviewRevenue management overview
Revenue management overviewchinichiang0707
 
Airline Marketing 5 airline marketing strategies
Airline Marketing 5  airline marketing strategiesAirline Marketing 5  airline marketing strategies
Airline Marketing 5 airline marketing strategiesNarudh Cheramakara
 
Challenges in aviation industry
Challenges in aviation industryChallenges in aviation industry
Challenges in aviation industry60ml
 
Airline Business Models and Competitive Strategies - virtual simulation course
Airline Business Models and Competitive Strategies - virtual simulation courseAirline Business Models and Competitive Strategies - virtual simulation course
Airline Business Models and Competitive Strategies - virtual simulation courseIATA Training & Development Institute
 
Introduction to Airline Industry
Introduction to Airline IndustryIntroduction to Airline Industry
Introduction to Airline Industryvivianmeril
 
Aviation Basic ( Res & Ticketing )
Aviation Basic ( Res & Ticketing )Aviation Basic ( Res & Ticketing )
Aviation Basic ( Res & Ticketing )Simranjit Walia
 
Airline Marketing 8. distribution
Airline Marketing 8. distributionAirline Marketing 8. distribution
Airline Marketing 8. distributionNarudh Cheramakara
 

What's hot (20)

Airline pricing & demand
Airline pricing & demandAirline pricing & demand
Airline pricing & demand
 
Airline Revenue Managemant
Airline Revenue ManagemantAirline Revenue Managemant
Airline Revenue Managemant
 
Airline Deregulation and the Evolution of Airline Market Power in the United ...
Airline Deregulation and the Evolution of Airline Market Power in the United ...Airline Deregulation and the Evolution of Airline Market Power in the United ...
Airline Deregulation and the Evolution of Airline Market Power in the United ...
 
Yield management in the airline industry
Yield management in the airline industry Yield management in the airline industry
Yield management in the airline industry
 
airline deregulation
airline deregulationairline deregulation
airline deregulation
 
Aviation terminology by Kalyan S Patil
Aviation terminology by Kalyan S PatilAviation terminology by Kalyan S Patil
Aviation terminology by Kalyan S Patil
 
Air Fare
Air Fare Air Fare
Air Fare
 
Airline Cost Route Profitability System
Airline Cost  Route Profitability SystemAirline Cost  Route Profitability System
Airline Cost Route Profitability System
 
Aviation
AviationAviation
Aviation
 
Revenue management overview
Revenue management overviewRevenue management overview
Revenue management overview
 
Airline Marketing 5 airline marketing strategies
Airline Marketing 5  airline marketing strategiesAirline Marketing 5  airline marketing strategies
Airline Marketing 5 airline marketing strategies
 
Challenges in aviation industry
Challenges in aviation industryChallenges in aviation industry
Challenges in aviation industry
 
Airline Industry
Airline IndustryAirline Industry
Airline Industry
 
Global Distribution System
Global Distribution SystemGlobal Distribution System
Global Distribution System
 
Airport management
Airport managementAirport management
Airport management
 
Airline Business Models and Competitive Strategies - virtual simulation course
Airline Business Models and Competitive Strategies - virtual simulation courseAirline Business Models and Competitive Strategies - virtual simulation course
Airline Business Models and Competitive Strategies - virtual simulation course
 
Introduction to Airline Industry
Introduction to Airline IndustryIntroduction to Airline Industry
Introduction to Airline Industry
 
Aviation Basic ( Res & Ticketing )
Aviation Basic ( Res & Ticketing )Aviation Basic ( Res & Ticketing )
Aviation Basic ( Res & Ticketing )
 
Airline Marketing 8. distribution
Airline Marketing 8. distributionAirline Marketing 8. distribution
Airline Marketing 8. distribution
 
Route development
Route developmentRoute development
Route development
 

Viewers also liked

Panduan reservasi tiket dengan sistem ATA Corp
Panduan reservasi tiket dengan sistem ATA CorpPanduan reservasi tiket dengan sistem ATA Corp
Panduan reservasi tiket dengan sistem ATA CorpTumijan Arsho
 
3. cara booking dan issued tiket pesawat
3. cara booking dan issued tiket pesawat3. cara booking dan issued tiket pesawat
3. cara booking dan issued tiket pesawatMaazz Setyawan
 
Panduan Pembayaran PPOB ATA Grass
Panduan Pembayaran PPOB ATA GrassPanduan Pembayaran PPOB ATA Grass
Panduan Pembayaran PPOB ATA GrassTumijan Arsho
 
Sistem Bisnis Tiket Pesawat Online ATA Indonesia
Sistem Bisnis Tiket Pesawat Online ATA IndonesiaSistem Bisnis Tiket Pesawat Online ATA Indonesia
Sistem Bisnis Tiket Pesawat Online ATA IndonesiaTumijan Arsho
 
Langkah langkah menjadi agen tour and travel
Langkah langkah menjadi agen tour and travelLangkah langkah menjadi agen tour and travel
Langkah langkah menjadi agen tour and travelAndi Aryatno
 
Proposed* Fare Adjustment - Public Meeting
Proposed* Fare Adjustment - Public MeetingProposed* Fare Adjustment - Public Meeting
Proposed* Fare Adjustment - Public MeetingCOTA BUS
 
Proposed COTA Fare Structure
Proposed COTA Fare StructureProposed COTA Fare Structure
Proposed COTA Fare StructureCOTA BUS
 
Ticket and airline terms (Airport matters)
Ticket and airline terms (Airport matters) Ticket and airline terms (Airport matters)
Ticket and airline terms (Airport matters) ayeshazenemij
 
South West Airlines: Balancing The Price-Value Equation.
South West Airlines: Balancing The Price-Value Equation.South West Airlines: Balancing The Price-Value Equation.
South West Airlines: Balancing The Price-Value Equation.Syed Salman
 
Pricing strategy of Indigo airlines
Pricing strategy of  Indigo airlinesPricing strategy of  Indigo airlines
Pricing strategy of Indigo airlinesBhooshan Kanani
 
Cruise chapter 6
Cruise chapter 6Cruise chapter 6
Cruise chapter 6Mauikho09
 
Indigo airlines case study
Indigo airlines   case studyIndigo airlines   case study
Indigo airlines case studyNilesh Mashru
 
Low Price Carriers in India
Low Price Carriers in IndiaLow Price Carriers in India
Low Price Carriers in Indiajaijai
 

Viewers also liked (20)

Panduan reservasi tiket dengan sistem ATA Corp
Panduan reservasi tiket dengan sistem ATA CorpPanduan reservasi tiket dengan sistem ATA Corp
Panduan reservasi tiket dengan sistem ATA Corp
 
3. cara booking dan issued tiket pesawat
3. cara booking dan issued tiket pesawat3. cara booking dan issued tiket pesawat
3. cara booking dan issued tiket pesawat
 
Panduan Pembayaran PPOB ATA Grass
Panduan Pembayaran PPOB ATA GrassPanduan Pembayaran PPOB ATA Grass
Panduan Pembayaran PPOB ATA Grass
 
Sistem Bisnis Tiket Pesawat Online ATA Indonesia
Sistem Bisnis Tiket Pesawat Online ATA IndonesiaSistem Bisnis Tiket Pesawat Online ATA Indonesia
Sistem Bisnis Tiket Pesawat Online ATA Indonesia
 
Price elasticity of demand
Price elasticity of demandPrice elasticity of demand
Price elasticity of demand
 
Selling and Pricing Cruises
Selling and Pricing CruisesSelling and Pricing Cruises
Selling and Pricing Cruises
 
Langkah langkah menjadi agen tour and travel
Langkah langkah menjadi agen tour and travelLangkah langkah menjadi agen tour and travel
Langkah langkah menjadi agen tour and travel
 
Airline pricing & demand
Airline pricing & demandAirline pricing & demand
Airline pricing & demand
 
Aviation business overview 5
Aviation business overview  5Aviation business overview  5
Aviation business overview 5
 
Aviation and socio economic dynamics
Aviation and socio economic dynamicsAviation and socio economic dynamics
Aviation and socio economic dynamics
 
Proposed* Fare Adjustment - Public Meeting
Proposed* Fare Adjustment - Public MeetingProposed* Fare Adjustment - Public Meeting
Proposed* Fare Adjustment - Public Meeting
 
Proposed COTA Fare Structure
Proposed COTA Fare StructureProposed COTA Fare Structure
Proposed COTA Fare Structure
 
Ticket and airline terms (Airport matters)
Ticket and airline terms (Airport matters) Ticket and airline terms (Airport matters)
Ticket and airline terms (Airport matters)
 
South West Airlines: Balancing The Price-Value Equation.
South West Airlines: Balancing The Price-Value Equation.South West Airlines: Balancing The Price-Value Equation.
South West Airlines: Balancing The Price-Value Equation.
 
Dynamic pricing
Dynamic pricingDynamic pricing
Dynamic pricing
 
Airline fares
Airline faresAirline fares
Airline fares
 
Pricing strategy of Indigo airlines
Pricing strategy of  Indigo airlinesPricing strategy of  Indigo airlines
Pricing strategy of Indigo airlines
 
Cruise chapter 6
Cruise chapter 6Cruise chapter 6
Cruise chapter 6
 
Indigo airlines case study
Indigo airlines   case studyIndigo airlines   case study
Indigo airlines case study
 
Low Price Carriers in India
Low Price Carriers in IndiaLow Price Carriers in India
Low Price Carriers in India
 

Similar to Airfare pricing process & strategies

Overbooking policy revenue management1
Overbooking policy  revenue management1Overbooking policy  revenue management1
Overbooking policy revenue management1Mohammed Awad
 
IATA areas traffic Conferences.pptx
IATA areas traffic Conferences.pptxIATA areas traffic Conferences.pptx
IATA areas traffic Conferences.pptxAmitGayatriSingh1
 
Profiting from uncertainty
Profiting from uncertaintyProfiting from uncertainty
Profiting from uncertaintyTom Bacon
 
Airline revenue management
Airline revenue managementAirline revenue management
Airline revenue managementZahide Bakar
 
Marketing Airline
Marketing AirlineMarketing Airline
Marketing Airlinezeeshanvali
 
Elevate 2017 - The Sandbox: Competing on Total Price
Elevate 2017 - The Sandbox: Competing on Total PriceElevate 2017 - The Sandbox: Competing on Total Price
Elevate 2017 - The Sandbox: Competing on Total PriceATPCO
 
Elevate 2017- Pricing evolution: The Road to Dynamic Offer Generation
Elevate 2017- Pricing evolution: The Road to Dynamic Offer GenerationElevate 2017- Pricing evolution: The Road to Dynamic Offer Generation
Elevate 2017- Pricing evolution: The Road to Dynamic Offer GenerationATPCO
 
Airline revenue management
Airline revenue managementAirline revenue management
Airline revenue managementElene Termokiva
 
Travel Management Company (TMC) Transformation Solutions | WNS TRAVOGUE
Travel Management Company (TMC) Transformation Solutions | WNS TRAVOGUETravel Management Company (TMC) Transformation Solutions | WNS TRAVOGUE
Travel Management Company (TMC) Transformation Solutions | WNS TRAVOGUERNayak3
 
Southwest airlines swot
Southwest airlines swotSouthwest airlines swot
Southwest airlines swotAsmat Mak
 
Overbooking policy for an Airline
Overbooking policy for an AirlineOverbooking policy for an Airline
Overbooking policy for an AirlineMohammed Hadi
 
Overbooking Policy For Airlines
Overbooking Policy For AirlinesOverbooking Policy For Airlines
Overbooking Policy For AirlinesMohammed Awad
 
Airfares Global Distribution Strategy for Higher Incremental Revenues in Non-...
Airfares Global Distribution Strategy for Higher Incremental Revenues in Non-...Airfares Global Distribution Strategy for Higher Incremental Revenues in Non-...
Airfares Global Distribution Strategy for Higher Incremental Revenues in Non-...Simon Riha, MSc, MBA
 
Credibility in threats and commitments in sequential games is base.docx
Credibility in threats and commitments in sequential games is base.docxCredibility in threats and commitments in sequential games is base.docx
Credibility in threats and commitments in sequential games is base.docxvanesaburnand
 
Kiodex whitepaper useof_cashflowatriskreports[1]
Kiodex whitepaper useof_cashflowatriskreports[1]Kiodex whitepaper useof_cashflowatriskreports[1]
Kiodex whitepaper useof_cashflowatriskreports[1]Marc898521
 
International pricing
International pricingInternational pricing
International pricingVijyata Singh
 
Indian Civil Aviation Industry
Indian Civil Aviation IndustryIndian Civil Aviation Industry
Indian Civil Aviation IndustryNeha Kumar
 
Educational content and educational content
Educational content and educational contentEducational content and educational content
Educational content and educational contentOlajide Kuku
 

Similar to Airfare pricing process & strategies (20)

Overbooking policy revenue management1
Overbooking policy  revenue management1Overbooking policy  revenue management1
Overbooking policy revenue management1
 
IATA areas traffic Conferences.pptx
IATA areas traffic Conferences.pptxIATA areas traffic Conferences.pptx
IATA areas traffic Conferences.pptx
 
Profiting from uncertainty
Profiting from uncertaintyProfiting from uncertainty
Profiting from uncertainty
 
Airline revenue management
Airline revenue managementAirline revenue management
Airline revenue management
 
Marketing Airline
Marketing AirlineMarketing Airline
Marketing Airline
 
Elevate 2017 - The Sandbox: Competing on Total Price
Elevate 2017 - The Sandbox: Competing on Total PriceElevate 2017 - The Sandbox: Competing on Total Price
Elevate 2017 - The Sandbox: Competing on Total Price
 
Elevate 2017- Pricing evolution: The Road to Dynamic Offer Generation
Elevate 2017- Pricing evolution: The Road to Dynamic Offer GenerationElevate 2017- Pricing evolution: The Road to Dynamic Offer Generation
Elevate 2017- Pricing evolution: The Road to Dynamic Offer Generation
 
Airline revenue management
Airline revenue managementAirline revenue management
Airline revenue management
 
Travel Management Company (TMC) Transformation Solutions | WNS TRAVOGUE
Travel Management Company (TMC) Transformation Solutions | WNS TRAVOGUETravel Management Company (TMC) Transformation Solutions | WNS TRAVOGUE
Travel Management Company (TMC) Transformation Solutions | WNS TRAVOGUE
 
Southwest airlines swot
Southwest airlines swotSouthwest airlines swot
Southwest airlines swot
 
Overbooking policy for an Airline
Overbooking policy for an AirlineOverbooking policy for an Airline
Overbooking policy for an Airline
 
Overbooking Policy For Airlines
Overbooking Policy For AirlinesOverbooking Policy For Airlines
Overbooking Policy For Airlines
 
Airfares Global Distribution Strategy for Higher Incremental Revenues in Non-...
Airfares Global Distribution Strategy for Higher Incremental Revenues in Non-...Airfares Global Distribution Strategy for Higher Incremental Revenues in Non-...
Airfares Global Distribution Strategy for Higher Incremental Revenues in Non-...
 
Credibility in threats and commitments in sequential games is base.docx
Credibility in threats and commitments in sequential games is base.docxCredibility in threats and commitments in sequential games is base.docx
Credibility in threats and commitments in sequential games is base.docx
 
Kiodex whitepaper useof_cashflowatriskreports[1]
Kiodex whitepaper useof_cashflowatriskreports[1]Kiodex whitepaper useof_cashflowatriskreports[1]
Kiodex whitepaper useof_cashflowatriskreports[1]
 
International pricing
International pricingInternational pricing
International pricing
 
Indian Civil Aviation Industry
Indian Civil Aviation IndustryIndian Civil Aviation Industry
Indian Civil Aviation Industry
 
Core product
Core productCore product
Core product
 
Mba622a
Mba622aMba622a
Mba622a
 
Educational content and educational content
Educational content and educational contentEducational content and educational content
Educational content and educational content
 

More from Aviation Institute of Management

Future of Aviation - Presentation at ATRS World Conference 2016, Rhodes, Greece
Future of Aviation - Presentation at ATRS World Conference 2016, Rhodes, GreeceFuture of Aviation - Presentation at ATRS World Conference 2016, Rhodes, Greece
Future of Aviation - Presentation at ATRS World Conference 2016, Rhodes, GreeceAviation Institute of Management
 

More from Aviation Institute of Management (20)

Graduate Certificate in Aviation
Graduate Certificate in AviationGraduate Certificate in Aviation
Graduate Certificate in Aviation
 
Certificate in Aviation Business Administration
Certificate in Aviation Business AdministrationCertificate in Aviation Business Administration
Certificate in Aviation Business Administration
 
Aviation and Islam
Aviation and IslamAviation and Islam
Aviation and Islam
 
Graduate Certificate in Aviation
Graduate Certificate in AviationGraduate Certificate in Aviation
Graduate Certificate in Aviation
 
The plight of the policy; and PIA's predicament
The plight of the policy; and PIA's predicament The plight of the policy; and PIA's predicament
The plight of the policy; and PIA's predicament
 
Aviation Awareness Expo 2016
Aviation Awareness Expo 2016Aviation Awareness Expo 2016
Aviation Awareness Expo 2016
 
Future of Aviation - Presentation at ATRS World Conference 2016, Rhodes, Greece
Future of Aviation - Presentation at ATRS World Conference 2016, Rhodes, GreeceFuture of Aviation - Presentation at ATRS World Conference 2016, Rhodes, Greece
Future of Aviation - Presentation at ATRS World Conference 2016, Rhodes, Greece
 
Human Factors in Aviation
Human Factors in AviationHuman Factors in Aviation
Human Factors in Aviation
 
Research Methodology
Research Methodology  Research Methodology
Research Methodology
 
Airline Cost Structures
Airline Cost StructuresAirline Cost Structures
Airline Cost Structures
 
No frills fare warfare -- case study
No frills fare warfare -- case studyNo frills fare warfare -- case study
No frills fare warfare -- case study
 
Airline Pax Marketing
Airline Pax MarketingAirline Pax Marketing
Airline Pax Marketing
 
Economic characteristics of airlines
Economic characteristics of airlinesEconomic characteristics of airlines
Economic characteristics of airlines
 
Aviation business overview 7
Aviation business overview   7Aviation business overview   7
Aviation business overview 7
 
Aviation business overview 9
Aviation business overview   9Aviation business overview   9
Aviation business overview 9
 
Aviation business overview 8
Aviation business overview   8Aviation business overview   8
Aviation business overview 8
 
Roving the Wonder World of Aviation wm
Roving the Wonder World of Aviation   wmRoving the Wonder World of Aviation   wm
Roving the Wonder World of Aviation wm
 
Aviation business basics 3
Aviation business basics   3Aviation business basics   3
Aviation business basics 3
 
Quiz - Basic 1
Quiz - Basic 1Quiz - Basic 1
Quiz - Basic 1
 
Aviation business overview 6
Aviation business overview   6Aviation business overview   6
Aviation business overview 6
 

Recently uploaded

Auchitya Theory by Kshemendra Indian Poetics
Auchitya Theory by Kshemendra Indian PoeticsAuchitya Theory by Kshemendra Indian Poetics
Auchitya Theory by Kshemendra Indian PoeticsDhatriParmar
 
PHARMACOGNOSY CHAPTER NO 5 CARMINATIVES AND G.pdf
PHARMACOGNOSY CHAPTER NO 5 CARMINATIVES AND G.pdfPHARMACOGNOSY CHAPTER NO 5 CARMINATIVES AND G.pdf
PHARMACOGNOSY CHAPTER NO 5 CARMINATIVES AND G.pdfSumit Tiwari
 
3.12.24 The Social Construction of Gender.pptx
3.12.24 The Social Construction of Gender.pptx3.12.24 The Social Construction of Gender.pptx
3.12.24 The Social Construction of Gender.pptxmary850239
 
AI Uses and Misuses: Academic and Workplace Applications
AI Uses and Misuses: Academic and Workplace ApplicationsAI Uses and Misuses: Academic and Workplace Applications
AI Uses and Misuses: Academic and Workplace ApplicationsStella Lee
 
30-de-thi-vao-lop-10-mon-tieng-anh-co-dap-an.doc
30-de-thi-vao-lop-10-mon-tieng-anh-co-dap-an.doc30-de-thi-vao-lop-10-mon-tieng-anh-co-dap-an.doc
30-de-thi-vao-lop-10-mon-tieng-anh-co-dap-an.docdieu18
 
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptxBBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptxProf. Kanchan Kumari
 
LEAD6001 - Introduction to Advanced Stud
LEAD6001 - Introduction to Advanced StudLEAD6001 - Introduction to Advanced Stud
LEAD6001 - Introduction to Advanced StudDr. Bruce A. Johnson
 
The OERs: Transforming Education for Sustainable Future by Dr. Sarita Anand
The OERs: Transforming Education for Sustainable Future by Dr. Sarita AnandThe OERs: Transforming Education for Sustainable Future by Dr. Sarita Anand
The OERs: Transforming Education for Sustainable Future by Dr. Sarita AnandDr. Sarita Anand
 
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in PharmacyASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in PharmacySumit Tiwari
 
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...AKSHAYMAGAR17
 
EDD8524 The Future of Educational Leader
EDD8524 The Future of Educational LeaderEDD8524 The Future of Educational Leader
EDD8524 The Future of Educational LeaderDr. Bruce A. Johnson
 
UNIT I Design Thinking and Explore.pptx
UNIT I  Design Thinking and Explore.pptxUNIT I  Design Thinking and Explore.pptx
UNIT I Design Thinking and Explore.pptxGOWSIKRAJA PALANISAMY
 
ICS2208 Lecture4 Intelligent Interface Agents.pdf
ICS2208 Lecture4 Intelligent Interface Agents.pdfICS2208 Lecture4 Intelligent Interface Agents.pdf
ICS2208 Lecture4 Intelligent Interface Agents.pdfVanessa Camilleri
 
VIT336 – Recommender System - Unit 3.pdf
VIT336 – Recommender System - Unit 3.pdfVIT336 – Recommender System - Unit 3.pdf
VIT336 – Recommender System - Unit 3.pdfArthyR3
 
The First National K12 TUG March 6 2024.pdf
The First National K12 TUG March 6 2024.pdfThe First National K12 TUG March 6 2024.pdf
The First National K12 TUG March 6 2024.pdfdogden2
 
LEAD5623 The Economics of Community Coll
LEAD5623 The Economics of Community CollLEAD5623 The Economics of Community Coll
LEAD5623 The Economics of Community CollDr. Bruce A. Johnson
 
Dhavni Theory by Anandvardhana Indian Poetics
Dhavni Theory by Anandvardhana Indian PoeticsDhavni Theory by Anandvardhana Indian Poetics
Dhavni Theory by Anandvardhana Indian PoeticsDhatriParmar
 
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...Nguyen Thanh Tu Collection
 

Recently uploaded (20)

Auchitya Theory by Kshemendra Indian Poetics
Auchitya Theory by Kshemendra Indian PoeticsAuchitya Theory by Kshemendra Indian Poetics
Auchitya Theory by Kshemendra Indian Poetics
 
PHARMACOGNOSY CHAPTER NO 5 CARMINATIVES AND G.pdf
PHARMACOGNOSY CHAPTER NO 5 CARMINATIVES AND G.pdfPHARMACOGNOSY CHAPTER NO 5 CARMINATIVES AND G.pdf
PHARMACOGNOSY CHAPTER NO 5 CARMINATIVES AND G.pdf
 
Least Significance Difference:Biostatics and Research Methodology
Least Significance Difference:Biostatics and Research MethodologyLeast Significance Difference:Biostatics and Research Methodology
Least Significance Difference:Biostatics and Research Methodology
 
3.12.24 The Social Construction of Gender.pptx
3.12.24 The Social Construction of Gender.pptx3.12.24 The Social Construction of Gender.pptx
3.12.24 The Social Construction of Gender.pptx
 
t-test Parametric test Biostatics and Research Methodology
t-test Parametric test Biostatics and Research Methodologyt-test Parametric test Biostatics and Research Methodology
t-test Parametric test Biostatics and Research Methodology
 
AI Uses and Misuses: Academic and Workplace Applications
AI Uses and Misuses: Academic and Workplace ApplicationsAI Uses and Misuses: Academic and Workplace Applications
AI Uses and Misuses: Academic and Workplace Applications
 
30-de-thi-vao-lop-10-mon-tieng-anh-co-dap-an.doc
30-de-thi-vao-lop-10-mon-tieng-anh-co-dap-an.doc30-de-thi-vao-lop-10-mon-tieng-anh-co-dap-an.doc
30-de-thi-vao-lop-10-mon-tieng-anh-co-dap-an.doc
 
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptxBBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
 
LEAD6001 - Introduction to Advanced Stud
LEAD6001 - Introduction to Advanced StudLEAD6001 - Introduction to Advanced Stud
LEAD6001 - Introduction to Advanced Stud
 
The OERs: Transforming Education for Sustainable Future by Dr. Sarita Anand
The OERs: Transforming Education for Sustainable Future by Dr. Sarita AnandThe OERs: Transforming Education for Sustainable Future by Dr. Sarita Anand
The OERs: Transforming Education for Sustainable Future by Dr. Sarita Anand
 
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in PharmacyASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
 
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
 
EDD8524 The Future of Educational Leader
EDD8524 The Future of Educational LeaderEDD8524 The Future of Educational Leader
EDD8524 The Future of Educational Leader
 
UNIT I Design Thinking and Explore.pptx
UNIT I  Design Thinking and Explore.pptxUNIT I  Design Thinking and Explore.pptx
UNIT I Design Thinking and Explore.pptx
 
ICS2208 Lecture4 Intelligent Interface Agents.pdf
ICS2208 Lecture4 Intelligent Interface Agents.pdfICS2208 Lecture4 Intelligent Interface Agents.pdf
ICS2208 Lecture4 Intelligent Interface Agents.pdf
 
VIT336 – Recommender System - Unit 3.pdf
VIT336 – Recommender System - Unit 3.pdfVIT336 – Recommender System - Unit 3.pdf
VIT336 – Recommender System - Unit 3.pdf
 
The First National K12 TUG March 6 2024.pdf
The First National K12 TUG March 6 2024.pdfThe First National K12 TUG March 6 2024.pdf
The First National K12 TUG March 6 2024.pdf
 
LEAD5623 The Economics of Community Coll
LEAD5623 The Economics of Community CollLEAD5623 The Economics of Community Coll
LEAD5623 The Economics of Community Coll
 
Dhavni Theory by Anandvardhana Indian Poetics
Dhavni Theory by Anandvardhana Indian PoeticsDhavni Theory by Anandvardhana Indian Poetics
Dhavni Theory by Anandvardhana Indian Poetics
 
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
 

Airfare pricing process & strategies

  • 8. • Responsibility of Airline Price Analyst
  • 13. Pricing tactics can be broadly categorized as: (1) Fare actions and, (2) Adjustments to fare rules and/or restrictions. Normally, daily pricing activity involves both tactics.
  • 14. Fare actions involve changes—increases or reductions — to actual fare levels, in contrast to the rules, restrictions, and/or footnotes that accompany most fares. Changes can be market specific, regional, or mass market in scope.
  • 15. Introductory fares. When a carrier begins service in a new market, it typically offers unrestricted low fare – also called Market penetration pricing System excursion-fare. During seasonally weak traffic periods, carriers frequently offer a system wide sale of excursion fares. (7 to 10 days)
  • 16. • System business-fare sales. • Connect market sales. • Target segment pricing. • Flight-time-specific. • Mileage-based pricing. • Zone pricing. • Value-added pricing.
  • 17. Adjusting Rules and Restrictions. This second set of tactics involves the periodic adjustment of rules and restrictions that accompany most fares rather than the dollar amount of the fares.
  • 18. Common rules and restrictions tactics include the following: • Advance purchase requirements. • One-way versus round-trip purchase. • Minimum or maximum stays. • Fare penalties. • Directional pricing. • Peak and off-peak pricing. • Sales, ticketing, and travel windows.
  • 19. The decision to use any one, or a combination, of the tactics is essentially a decision to raise or lower a fare. For example, increasing the advance purchase restriction from 3 to 7 days on a discounted business fare will force a certain number of passengers to buy the next higher fare.
  • 20. 1. Subtract dilution. Dilution results from those passengers willing to pay full fare. 2. Subtract refunds. Airlines normally obligate themselves through the so-called guarantees to pay back. 3. Subtract advertising. To the extent that previously unbudgeted funds are catered. 4. Subtract additional variable passenger costs. Traffic liability insurance, food, and reservations fees are the expenses
  • 21. 5. Add spill. When a newly introduced fare is especially low and is matched by all major competitors in the market, it has the potential to stimulate primary demand. 6. Add rejected demand by other airlines. At times, certain airlines will tightly restrict the number of seats sold at a particular discounted fare.
  • 22. Steps in Analyzing a Fare Increase. In the case of a fare increase, there are fewer factors to consider in estimating the net economic impact. The formula becomes simply: revenue gain or loss from elasticity plus passenger variable costs avoided. With the introduction of a fare increase, spin and rejected demand are irrelevant. Likewise, there is no potential
  • 23. The objective of inventory management is to maximize individual flight revenue. In the simplest terms, inventory analysts face the task of selling as many seats as possible at the highest possible fares. This usually means making available an adequate number of lower-fare seats far in advance of the departure date in order to accommodate price-sensitive business travelers. It’s a tricky balancing act that requires a keen understanding of the competitive dynamics and traffic composition of individual markets and flights.
  • 24. Pricing Behavior and Non-price Characteristics in the Airline Industry (Advances in Airline Economics) by James Peoples The Future of Pricing: How Airline Ticket Pricing Has Inspired a Revolution by E. Andrew Boyd Air Transport by John Wensveen