Pricing Strategy Adopted by Regional Airline

1355 WordsNov 3, 20106 Pages
An Airlines route planning emerges from the company’s vision and mission it has given itself. Whether airlines will serve long haul intercontinental routes, medium or short haul routes, primary routes within a region or a country, or feeder level sector, is determined directly from the owner’s or the management’s set of goals and purpose of business. Each of the above business segments has its own characteristics in terms of investments revenues potential, costs, as well as production requirements. The new airline 's pricing strategy will also set it apart from the pack and will form a key aspect of its overall marketing strategy. Factors to consider before pricing are: (i) Cost factors: - An airline incurs two types of cost of…show more content…
However, connecting flight carrier may attempt to gain increased market presence and steal market share by introducing a low fare. So, the airline may attempt the same strategy in nonstop markets. 4. Excursion Fares: During seasonally weak traffic periods, the carrier may offer a system wide sale of excursion fares, which can be conducted for a period of 7-10 days, with travel allowed 2-4 months into the future. As the purpose is not just to generate cash, the volume of seats offered in such a sale shall be limited and controlled on a flight-by-flight basis. 5. Target Segment Pricing: These are special fares which are lower than published fares and are aimed at a well-defined target audience such as military personnel, senior citizens, or students which require some identity proof to avail these. As audience for these fares is small, the risk of diluting current revenues is minimal. 6. Mileage and Zone Pricing: It is more streamlined variation of mileage based pricing. The longer-distance regions can be priced higher than shorter-distance ones. From the origin, destinations might be grouped into one of several e.g. Northeast, South, Metros etc with each regional group be charged with the different price according to distance. Fare Rules

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