Spirit Airlines Pricing Strategy Essay

The pricing strategy does not really differentiate it from the competitors as value-based service is not provided by the airlines. The low-cost structure and revenue strategy of Spirit Airlines give it a sustainable competitive

On the downside, Spirit airlines do not have a lot of leg room for their customer comfort. Yes, Spirit airlines are relatively cheap; however, for each amenity they offer which include bag carry on, beverages, and food there is a price added to the airfare price. Spirit also does not have any entertainment aboard their flights for their customers’ enjoyment. This has made customers opt with flying with Spirit.

Flight Centre offers a very competitive price. The prices are usually are lower than its competitors when it comes to domestic and international flights. It provides the option of different prices ranges. These price ranges depend on the services that a customer requests. It provides economy class, business class, premium class, and first class price ranges. Due to its affordable prices and good services, it has grown to become a 13.5$ billion business comprising of more than 30 brands. It works had to keep up with the competition by providing best possible prices while ensuring customer loyalty (Flight Centre the Airfare Expert).

• Offer low fares and still maintain a high-quality distinguished product that offers friendly service and a comfortable and entertaining flight experience.

Jerome Simelane, the airline's Commercial GM, “By using what we have learned over the years about international airline best practice‚ we have also created a cost structure which allows us to offer competitive fares without cutting any corners on quality‚ safety and reliability."

Small business customers and leisure travelers were the ones benefited the most from American’s new fare structure. Previously, small business customers who does not have the power and volume to negotiate with airline companies for discounted deals had to pay higher rates for first-class or coach tickets. American’s new cost structure reduced the full coach fares which allowed small business customers to purchase flight tickets at cheaper prices more conveniently. Leisure travelers, unlike business travelers, have more flexibility in terms of travel dates, thus allowing them to take advantage of the advance-purchase discounts and Saturday-night stay discounts under the new fare system.

Travel agents therefore are both positively and negatively impacted. Small business customers are positively impacted by the fare changes. Previously, the higher full fare prices discouraged small business travel; small businesses would either decide against travel or incur the cost of a Saturday night stay and purchase a reduced fare ticket. By reducing the full coach fares, small businesses will be able to purchase more convenient flights at more economical prices. Large businesses, on the other hand, may be negatively impacted. Since many large businesses had negotiated discount rate contracts with airlines, the new full coach fare may be higher than these negotiated fares. For large businesses that did not have negotiated contracts, the fares will be lower than the previous full fare rate.

fares to establish profitability and loyalty. However, they are not always the cheapest, so their

In fact, Spirit Airlines distribute tickets through both Direct and Indirect channels to exploit the profits (Tnooz, 2011). With direct distribution, the airline directly distributes tickets conventionally to the customers, using the internet as its primary disbursement channel. Whereas the indirect channel involves selling through channel intermediaries like wholesalers and retailers.

The airline industry has always been a fiercely competitive sector. Since the invention of low-cost carriers, also known as no-frills or

Southwest uses a strategy that keeps their costs low, while maintaining similar value. Southwest’s strategy greatly helped them gain a competitive advantage in the U.S. domestic flights market because at the time, most other airlines offered flights at higher prices and with three different classes of airfare. This allowed Southwest to be the first movers into the idea of cost friendly flights. And because no one else could compete with Southwest’s low cost, their innovative idea allowed them to be cost leaders in this market. Southwest’s main policy is providing the cheapest flights with only one class of flight. They kept costs low through their use of cost drivers. And by keeping the costs low, Southwest created a competitive disadvantage

In April 1992, American Airlines launched "Value Pricing" -- a radical simplification of the complex pricing structure that had evolved over more than a decade following deregulation of the U.S. domestic airline industry. American expected that the new pricing structure would benefit consumers and restore profitability to both American and the industry as a whole. The critical issue raised is: Would American's bold initiative work?

Witnessing the success of Southwest model and its potential, it wasn’t long until its success was imitated in other continental markets.

Classic Airlines is established in over 240 cities, employs over 32,000 people, and is the world’s fifth largest airline with a fleet of over 375 jets. Last year, it yielded over $8.7 billion in sales. However, Classic is currently faced with many challenges derived from internal and external factors. This paper will identify and apply a problem solving process to Classic’s current crisis. It will also include consideration of the internal and external pressures contributing to Classic’s current crisis, objectives and obstacles of the marketing department, and the marketing resources available to help cure this crisis.

AirAsia believes in the hassle free, no frills, low fare business concept and feels that keeping costs low needs high efficiency in every part of the business. Efficiency creates savings which are then passed to the customers so that they will able to purchase on the affordable price but still with a high quality of air travel. AirAsia targets people who want to travel around Asia for leisure or business purposes. The fares of Air Asia are relatively known as a lower fares than the other airlines. Selected strategy used by Air Asia targeting to passengers who are willing to travel without frills of meals, airport lounges or frequent flyer miles in exchange for fares which is