Running Head: Peregrine Airlines: Strategic Planning and Management Controls 1 Peregrine Airlines: Strategic Planning and Management Controls John Wilson Embry Riddle Aeronautical University
Peregrine Airlines: Strategic Planning and Management Controls 2 Peregrine Airlines: Strategic Planning and Management Controls Pricing Strategy In today’s competitive market an airline’s pricing strategy is extremely important in maximizing its revenue as well as maintaining its competitive edge within the industry. A pricing strategy can make an airline stand out. As with all airlines, Peregrine Airline inventory consists of seats on airplanes. These seats are a time-limited resource and once an aircraft takes off the unsold seats can no longer generate revenue. This makes it imperative to have a pricing strategy that will both entice customers to choose Peregrine Airlines over its competitors and will maximize revenue. Utilizing specialized yield management software Peregrine Airlines will implement bundling tactics, product-suggestion analytics, and dynamic pricing to optimize total revenue. Additionally, Peregrine Airlines can not just focus on the seat price, while this is the primary source of revenue, it is not the only source. Ancillary sales such as checked baggage, onboard food, entertainment, and additional services that a customer can purchase before, during, and after their flight must also be considered. [ CITATION Boi17 \l 1033 ] Operational Costs The key to developing an effective pricing strategy and airline must know is operating cost. Operating an airline is not cheap and several operating costs are required to keep an airline running. In 2017, the International Air Transport Association estimated that U.S. Airlines earned on average $16.32 in profits per passenger[ CITATION Gar17 \l 1033 ] and the Wall Street
You've reached the end of your free preview.
Want to read all 6 pages?