Question

Topic: Student Questions

Airline Pricing Strategies

Posted by Anonymous on 11/10/2004 at 2:38 PM ET 250 Points
Why dont airlines give you the full price when booking straight away?
To continue reading this question and the solution, sign up ... it's free!
SUBSCRIBE
Or, SIGN IN

RESPONSES

  • Posted by Peter (henna gaijin) on 11/10/2004 at 7:10 PM Member
    Can you expand on your question - perhaps give an example? It is not clear to me what you are asking.

    You can add comments by filling in the box below this (you need to be logged in to MarketingProfs to see the entry box).
  • Posted by Carl Crawford on 11/10/2004 at 9:58 PM Member
    hi ash56,

    are you asking "Why do the air lines give you a cheaper flight if you show up right before the plane is about to leave"?

    if you are then, it is because the seat on the air plane cant not be saved for another day, it is a service that is consumed when you buy it.

    The air line cant save the seat for another day when there might be lots of people wanting to fly, because it is an intangible product. So they decide to get any money they can out of you, because after the plan leaves the spare seat is a just extra weight for the plane to carry around.

    do you understand what i am saying? if you don’t contact me by email (click my name) and i will try to help you a bit more. Please include a link to the question so i can remember what i said

    have a nice day

    Carl Crawford
  • Posted on 11/10/2004 at 10:47 PM Member
    Where are you located? I'm not sure I've ever had the problem you are describing. I think I always get the full price, or if I don't they tell me very specifically what else will be added (landing fees, security surcharges, etc.).

    Maybe I don't understant the question. Please elaborate and we'll be glad to help.
  • Posted by SRyan ;] on 11/11/2004 at 4:56 AM Member
    I'm like the other folks here -- I haven't experienced this problem.

    Is this a hypothetical question for a classroom assignment?
  • Posted by SRyan ;] on 11/11/2004 at 5:26 AM Member
    Okay, then let me suggest that you go to the Important Guidelines page and read ITEM FIVE. It might help you understand how to reframe your question, which you can do by adding your own comments to this thread.

    For example: What do you think? Are airlines deliberately trying to deceive the customer? Or are their pricing models fluctuating within nanoseconds to keep up with competitor fares?
  • Posted by Mushfique Manzoor on 11/11/2004 at 5:43 AM Member
    hi ash56

    i have gone through all your inputs.

    from my understanding and experience, airlines quote a certain price on the ticket but most of the cases charge lower than that. are trying to know why and how they do that??

    P.S. i have never bough any airline ticket online,so no idea in that regard

    cheers!!
  • Posted by Chris Blackman on 11/12/2004 at 8:44 PM Accepted
    Marcus has hit one important nail on the head - as have others - an airline seat is a perishable commodity just like a pineapple. Once the plane takes of, the seats are gone, whether they were sold or unsold.

    But I think what Ash is really asking is more about the disclosure policy f certain airlines regarding the additional costs payable by the traveller but which do not form part of the airline's revenue stream - they are taxes and charges being collected by the airline on behalf of the government, the airport operator, and other parties.

    In Australia, our Consumer legislation requires advertising and sales information to disclose the full cost the consumer has to pay. It's fine to break it down and show the taxes and charges separately, but you cannot advertise a ticket for say $59 if the consumer really has to pay $79 to buy it.

    So perhaps Ash has been given an example of an airline somewhere which is allowed to disclose the revenue component of the airfare alone, and the full cost including miscellaneous taxes and charges separately when giving the consumer the bill?

    IMO any airline doing this is asking for trouble. A person is entitled to know what is the full cost they are being asked to pay before they get their wallet out.

    However this is not the custom is some countries. How many people have picked up a book or magazine at a US airport, seen the price on the cover (say $4.95) and then been stunned when they go to the cash register and are asked to pay $5.35... the cover price plus 8% sales tax?

    US residents may be used to this but in many other countries it is expected practice that the price shown is the price you pay. In fact in some jurisdictions this may even be legally enforceable as the vendor may have constructed one side of a contract which the consumer merely has to accept by agreeing to pay the stipulated price.

    When bar code scanning was first introduced here, the supermarkets created a code of practice in order to gain consumer trust. If a product scanned at the checkout with a price higher than shown on the shelf, the consumer was entitled to the product FREE!

    Ash, I don't know if this helps, but I hope I have covered some of the issues. If you can give us a specific example of an airline that does show one price then charge you something higher than that price, I would be very interested to see it.

    Cheers

    ChrisB
BACK TO TOP

Post a Comment

Related Discussions

Community Info

Top 25 Experts
(Student Questions)