The Impact Of Ticket Price On The Purchase Decision Of President University Student Essay

The Airline industry today offers services to nearly every place of the globe. The following economic factors that include consumer behaviour, currency rate, purchasing power of consumers, oil price plus the inflation plays key role in deriving the country’s economy. According to (Macmillan & Tampoe 2000), Airline industry itself is a leading economic force in terms of both its effects on associated industries for example aircraft manufacturing, operations and tourism. In this regard, this paper discusses the economic factors that affect the decision, the board of Air Asia needs to consider before acquiring 10 units of Air Bus model A350-1000 to increase its fleet of long haul airplanes.

AirAsia is a low cost leader in Asia. However, the competitors for AirAsia are numerous and it is hard for AirAsia to combat with those competitors. Thus, AirAsia will spare no effort to compete with them by keep the costs low. This lead to the bad perception of the customers that budget airlines like AirAsia may compromise safety to keep the costs low and those accident cases, terrorist attack, and disaster happened before will affect the customer confidence and AirAsia may face the losses of customers.

The increase in airfare will causes traveling demand to decrease since people are finding out means to travel rather not travel as much anymore since they are not willing to paying for the higher price.

Airline tickets have an elastic price when booked in advance. Long run consumers and organizations have time to shop around for the best fare. For example, to book a one-way ticket in coach class on December 8, 2009 for February 14, 2010 from Atlanta to Orlando the ticket price has a base price of $94 plus $10.60 for taxes and fees for a total cost of $104.60 whereas a one-way ticket for the same flight if booked on December 8, 2009 for December 8, 2009 has a base price of $305 plus $10.60 for a total cost of $315.60 (Delta, 2009). Short-run the airline ticket cost is inelastic because passengers are willing to pay a high price for any short-notice travel due to family emergencies or last-minute business meetings.

Today’s aviation industry is considered to be more robust then ever before. On most days, upwards of 100,000 flights across the world depart, delivering goods and servicing for travel. Passengers worldwide are finding air travel to be fast, reliable, safe and relatively inexpensive. While flight in itself remains the same, aircraft manufacturers are constantly looking for ways to improve such factors. Unfortunately, in today’s worldwide climate, there are several items which have a direct impact on ticket pricing. These items include taxes and fees, fuel cost, and ticket sell‘s. Furthermore with the increased sophistication of aircrafts today, cost to purchase, maintain, and operate such aircraft are significantly more than years past. However,

As it gets close to the flight date, the price of the airplane tickets become expensive. Except for the coach part, in which is the date from August 6th to August 7th, the date shows relevancy. People demand to buy their tickets, right before their willing date, rather than buying the ticket in the long future. For the first class, it also shows similar statistics, but for first class, the airplane tickets become much cheaper in terms of comparing the percentage rate between first class and coach class.

If the price of airfare increases the demand for air travel will fall. Less people will be able to afford the higher prices for air travel.

International Airlines Group like many businesses in the current economic climate has seen a dramatic change in the way they have to do business due to several social factors. The most prominent of the social factors is the alteration in consumer buying habits due to the

As the fast growth of technology, people prefer online shopping more than shopping in the physical store. A lot of surveys show us there’s a great increase in online shopping. For people to choose to shop online, pros should be more valuable than cons in their beliefs.

Increased interest rates & credit crunch in US are affecting people to spend on luxuries like long distance air travel. The economic environment of the airline sector has been characterized by growth in relation to most key figures. Air travel demand has closely mirrored the cyclical pattern shown by gross domestic product (GDP) figures in that it responds to cyclical upswings and downswings. However, air travel growth has far exceeded GDP growth over the period. Between 1960 and 1995 the total world economy, measured by GDP, grew by a factor of just over three, while air transport, measured by tonne-kilometres, grew by a factor of nearly 20 (Hanlon, 1999).Furthermore, fuel and aircraft prices are major expenditure items subject to fluctuations and the international orientation of the industry means that movements in foreign exchange rates can have major effects upon industry profitability. Holloway (1998) maintained that aviation managers face the need to pursue strategies capable of sustaining profitability throughout entire economic cycles.

Since the airline industry is a direct product of market conditions, it is greatly affected by all externalities. Many people noticed a decline in travel after the September 11th tragedy occurred due to safety concerns. When there is a huge increase in fares that definitely interferes with the demand for travel; it causes the price of tickets to continue to rise since a clear correlation between supply and demand exists. When the economy is doing well in terms of the employment rate, and when the dollar is strong people have the tendency to travel more (Jerram,1998).

In order to identify the optimal booking policy we have conducted simulation with 40 different booking levels for business and economy. As these two variables are independent, we have conducted consequential analysis. Results for business class level booking are in (figure 3). The detailed information about tested values is in Appendix B.

Online shopping is a modern concept which has grown in popularity with the rapid global growth in e-commerce. Apparently, many customers are attracted to this new concept of shopping because of the various benefits and offers of the internet. Online shoppers can enjoy the opportunity to shop at any time whenever convenient using an electronic device without the pressure of going to the traditional brick-and-mortar stores. It also allows browsing through seemingly never-ending options for merchandise or products not available in local stores and can let customers evaluate the different online stores to make comparison between items and products, their brands and prices which is difficult and time-consuming

Online customers are always seeking new products, new attractiveness and the most important thing being compatibility with their budget. The internet is the best way to save time and money through purchasing online within their range of budget on home or in anywhere. Online customers don’t have limits to online shopping. They also apply internet for comparison of prices of goods and services, news, visit social networks and search information and so on. The depressions have thus much impact on online customer’s behaviour (Rodriguez, 2009, p.3.). Online shopping behaviour depends on four factors such since shopping motives. Personality variables, internet knowledge and experience and last factors are shopping incentive. These are key determinants to influence the behaviour of online customers. Online seekers are

First the results of this study indicate that brand awareness (H1) has a significant influence on the purchase intention of online shoppers. Specifically this means that when people consider buying a product or service online, they would prefer a brand which has been advertized and they know about it. Nevertheless, brand awareness is likely to be a leading factor in the search for information stage in the online pre-purchase process. In this also called consideration stage (David Court, 2009), the largest number of brands takes place, but since today’s customers are awash in choices, it is eventually reduced based on other factors. This study reveals that consumers could change their preference in favor of an unknown brand if