Concerns of Airline

In recent years, with the growth of the economy, more and more people are willing to pay for their airline tickets to travel places far away from the departure location. But the price of air ticket is not stable and the there are various ways to buy it. The most favorable way is booking online. In order to get competitive advantages over other air companies. Many firms had set package of tickets is that twice return journey tickets. Customers always reserve ticket online before more than one or two month before the departure date so that they could get a big discount of price. The airline companies except set economy class also have business class and first class.

However, the price of air ticket setting contains many considerations. According to Clutterbuck (1994, p. 199) passengers always under the pressure to pay extra charge. The price of economy class is low but companies require many extra consumption such as adding baggage charge and if customers do not charge the baggage fee first then they will face to receive penalty for their baggage. And the extra charge almost equal to their price air ticket. In addition, Stavins (2001, p. 202) states that air ticket has price discrimination problems and airline firms refuse building standard of price. In another words, the price of first class is higher than business and economy class and the service between these three classes are obviously different, which leads price discrimination.

The following is a video of France airline to introduce the difference among classes

Furthermore, some marketers utilized quiet low price to attract consumers, which is infeasible. When customers ready to book or pay the ticket online the price will increase suddenly. So some website of air ticket is not reliable and marketers just intentionally induce passengers’ awareness.

http://www.qua.com/

From the strategy of price in marketing seems like it is fair for segmentation of different consumers. However, form the business ethical aspect the big gap of different price really exist potential negative impact on customers.

Form the view of customers airline companies actually need to be promoted. Taking Tiger, Virgin and Qantas three airline companies as the example. It is not difficult to realize that every time before boarding the airplane. The worker of Tiger takes a weighing instrument to filtrate people who over the limited weight and penalty them. For some customers who believe they pay less for their tickets. In fact, they pay more than they predict. Thus, tiger airline is weak compare with Virgin and Qantas. In some point of view, each firm has its own characteristics and different regulations. Oppositely, Virgin and Qantas provide better service and baggage is free.

 three01.PNG

From the experiences of people traveled could present another concern. According to Tellis (1988, p. 339) the elasticity of price is negative and wiser method are increasing quality and services. Consumers are sensitive to price change. Airline companies not well done with the price change strategy. During the period of festival, the price of ticket is much higher than normal period. Customers prefer traveling and ignore high ticket price.  By contract, when the demand of ticket is lower, companies reduce ticket price to maintain normal operating and stimulate sale volume.  As a consequence, airline companies should through offer better quality or services to improve ticket price rather than utilize busy period of festival to cheat money from consumers.

Suggest approaches to solve the considerations:

  • Increasing quality of service
  • Avoid using official website instead of virtual website
  • Setting ticket price relevant stable
  • Design special seat for special group of people and without extra charge

In conclusion, the price of airline mainly have three concerns are adding extra purchase, price discrimination to customers and elasticity of price is negative. Balancing ticket price and reducing the gap among classes.

 

 

Reference list:

 

Clutterbuck R, 1994, Terrorism in an Unstable World, Routledge, London and New York.

 

Stavins, J., 2001. Price discrimination in the airline market: The effect of market concentration. Review of Economics and Statistics, 83(1), pp.200-202.

 

Tellis, G.J., 1988. The price elasticity of selective demand: A meta-analysis of econometric models of sales. Journal of marketing research, pp.331-341.

by XIN FU

ID: 214382446

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s