Question

Based on the concepts of demand and supply, discuss the issues regarding airport taxes or terminal cost..What are the betterment for having low airport taxes and low terminal cost to attract more consumers? (Please explain more in details)

Answer 1

An airport tax is a tax levied on passengers for passing through an airport. The tax is generally imposed for use of the airport and is one of a number of taxes that are typically included in the price of an airline ticket. Revenue from airport taxes fund is used for facility maintenance.We need to get One Thing Staright that the Air-Ticket Pradigm lies solely on the Demand, Supply Factor and I would go on to Agree with both the Answers mentioned however they do not offer the Complete Picture. All the Airline have a Centralised Operating System as their Basic and then charge the Subsequent Profit they deem fit for the route. Then they Allocate Slots to their Pricing Systems and based on that Slots the Entire Ticketing System Functions Starting from the Lower Fares the Classes Ascend to the Highest. Depending upon the Route, the Airline Bifurcates their Fare Buckets into 3 Primary Classes which are:

1. First Class.
2. Business Class.
3. Coach/Cabin or Economy Class.

These are further classified into Sub-Classes and are tagged to their Repective Fare Buckets. When the Booking Opens Initially, the Airline merchandises the best deals then as the Seats Start filling-up the Lower Fares are taken Away by the Early customers and then the Remainder is allthe expensive seats. Now that the Cheaper Bets are Sold Out you have no choice untill a Cancellation pops up that deal again, but that is not necessary. Besides the the Flexibility of a Ticket is Directly Proportional to the Price viz., the Higher the Price the Larger the Flexibility. Thus now you can establish the Modus Operandi of the Esoteric Nature of Airfares. It also depends upon the elasticity of the customer. If a customer is in a hurry like the last remaining seats are charged high prices as if the demand for the seat increases as the plane is to depart. Supply is less and the customer with more emergency will play any price for the seat available. This is how it works on the basis of demand and supply of seats.