AERONAKED
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AeroNaked
Andres C. Anderson
Embry Riddle Aeronautical University
AERONAKED
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Airline Fare Structure
The unfairness of airline fares is the masterpiece behind optimizing revenue on airlines.
Airline revenue is based on RPM Revenue Passenger Mile, but an empty seat means there is no
passenger to measure miles of flight. Airlines from all sizes and all over the world play with the
demand to price each airline ticket. The goal of a well-stablished airline fare structure is to
develop a fare to best segment consumers by balancing competitiveness with the development of
revenue-maximizing strategies. In other words, each customer has a different willingness to pay
based on a variety of factors. These factors are the purpose of the trip, the perception of value,
the schedule need, the passenger’s economic circumstance, in other cases is the loyalty to the
airline, and finally, the competitive options. Charging only one price for the product will turn
away some customers, and will also allow some customers to pay less than they were willing to
pay. The pricing factor can segment the market using the following fare restrictions, advance
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- Fall '16
- Kelly Lawton
- Pricing, Passenger, Fare, Revenue passenger
