Question

In: Accounting

How do Airline tickets pricing factors directly translate into pricing strategies used by airlines?

How do Airline tickets pricing factors directly translate into pricing strategies used by airlines?

Solutions

Expert Solution

Answer)

Here, mostly the base costs like salaries of crew etc which may also include food,baggague but sometimes they may be an additional cost to the customers,airport charges and taxes, fuel charges will make up the pricing factors. But now a days they are also other factors are translating them to strategy. Some of them are:

1) Mostly airport offers discounts in airport charges if they are paid within certain time. Now, the airlines paying them in time will avail the discount which lower the cost and can help in declining them in price which may offer cheaper price for customers than their compitetors.

2)Now a days the airliners using another strategy for earning additional revenue. That is the more the fly time the less the air ticket chargers which discouraged the short timers. Here, the airliners are doing this as they get additional passengers who end their journey at that halt and other passengers who begin their Journey at that halt.

3) Pricing less at early period and after getting reasonble passengers which doesn't result in loss for that trip for airlines they increase their prices for who book their at last hours who are most important if there is demand the flight even like to extend their cabin for miles.


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