2. 1. The Development of Airline Fare:
Price part of marketing mix
• IATA Control Fares
• Single fare
• Deregulation Fare war
• Airlines, particularly short-haul, are seen as
homogenous products.
• Effectively like taxi; green, pink, yellow but they are
essentially the same
• The curse of airline competition: Airlines tend to reduce
the fare to ‘kill off’ competition. However, once the
competitor exits the market, new entry is abound
• Revenue Management
3. 2. Revenue Management
• Effectively selling the same product at different prices.
• To optimize revenues
• Demand-based pricing – Inflexible demand, higher
willingness to pay (This is why buying ticket at the
airport is more expensive)
• Think about Bangkok-Chang Mai price: Songkran v
Wednesday Afternoon
• Aid by computer software.
• The implication is that high-load factor on some flights
doesn’t translate into profits.
7. Price Discrimination
• Preventing High spenders from using lower fares
1. Minimum Stay condition
- Bangkok Airways REP case
2. Maximum Stay
- Longer the stay, the more expensive (7 days, 14 days, 1
– 3 -6- 12 months)
3. Advance Purchase
- This some times is not applicable for Thai LCC market
4. Saturday night stay rule
- Outdated but still exists in some cases
5. Flexibility Conditions
