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Running Head: Peregrine Airlines: Strategic Planning and Management Controls 1Peregrine Airlines: Strategic Planning and Management Controls John WilsonEmbry Riddle Aeronautical University
Peregrine Airlines: Strategic Planning and Management Controls 2Peregrine Airlines: Strategic Planning and Management ControlsPricing StrategyIn today’s competitive market an airline’s pricing strategy is extremely important inmaximizing its revenue as well as maintaining its competitive edge within the industry. A pricingstrategy can make an airline stand out. As with all airlines, Peregrine Airline inventory consistsof seats on airplanes. These seats are a time-limited resource and once an aircraft takes off theunsold seats can no longer generate revenue. This makes it imperative to have a pricing strategythat will both entice customers to choose Peregrine Airlines over its competitors and willmaximize revenue. Utilizing specialized yield management software Peregrine Airlines willimplement bundling tactics, product-suggestion analytics, and dynamic pricing to optimize totalrevenue. Additionally, Peregrine Airlines can not just focus on the seat price, while this is theprimary 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 CostsThe key to developing an effective pricing strategy and airline must know is operatingcost. Operating an airline is not cheap and several operating costs are required to keep an airlinerunning. In 2017, the International Air Transport Association estimated that U.S. Airlines earnedon average $16.32 in profits per passenger[ CITATION Gar17 \l 1033 ] and the Wall Street