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AERONAKED1AeroNakedAndres C. AndersonEmbry Riddle Aeronautical University
AERONAKED2Airline Fare StructureThe 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