Airline Pricing and Service Management

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Table of Contents

Airline pricing
Playing the Role of Marketing Manager
The Survey Questions
Low-Cost Carrier Pricing
References

Airline pricing

The pricing of air travel is currently the mandate of the airline industry. The new pricing techniques allow organizations to make reasonable profits while providing high-quality service to the public. Organizations must adhere to the prices set by the competitive market to maintain profitability in the flooded industry. Different pricing strategies allow airlines to serve a wide range of customers while maintaining their position in the market. For instance, an organization can use skim pricing to serve the high-end customers while using the absorption-pricing technique to serve the lower end customers.

Managers must be careful in comparing their prices with their rivals because of the many elements that determine the pricing of a product (Graham, 2014). For instance, an airport handling domestic travel cannot price its products the same way with an airport that handles international travel. Manchester airport is one of the renowned airports in the world for its cleanliness, courtesy of staff, and high levels of security. However, the airport has limited waiting areas and poor information department that makes it hard for customers to find their way around the facility.

Playing the Role of Marketing Manager

Service quality surveys enable the regulating authorities to determine if airlines are fit to operate. Marketing managers have a duty to ensure that the surveys are attractive enough to maintain customer satisfaction and maintain government standards (Graham, 2008). The survey questions presented in this paper address issues affecting the passengers, the airline, and the airside.

The Survey Questions

How many passengers arrive and depart using aerobridges?
How long does it take a passenger at the gate lobby?
How many passengers get lost between the check-in points and plane boarding centers in a day?
How many passengers pass the security inspection portals in an hour?
How many runways does the airport have, and what are the standards of the runways?
How effective is the information display screen and how many people does the system serve at a time?
How many people report lost baggage in a day?
How many aircraft does the airport hold?
What is the general standard of the washrooms?
How many private vehicles can the car parking space hold in an hour?

Low-Cost Carrier Pricing

Low-cost carriers face fewer competitions in the airline industry. Low-cost carriers are pace setters, and they determine the prices that airlines place on their products. All other airlines price their products based on the prices of low-cost carriers. For this reason, these carriers are rarely affected by competitive pricing initiatives in the market. The manager of a low-cost carrier should only alter their pricing if the general prices of products go down naturally in the market.

However, in cases where a single organization reduces their fares for business purposes, the low-cost carrier should not alter their prices. Such changes are temporary, and the organization will be forced to resume their normal charges eventually. On the other hand, if prices rise in the market, the low-cost carrier should also alter their pricing to maintain profitability and customer value. However, responding to competitor’s pricing strategy depends on the organization’s position in the market, the price elasticity, and the value sensitivity of the market (Miltenburg, 2005).

References

Graham, A. (2008). Managing airports: an international perspective. London: Routledge.

Graham, A. (2014). Managing Airports an International Perspective. Oxford: Butterworth-Heinemann.

Miltenburg, J. (2005). Manufacturing strategy: how to formulate and implement a winning plan. New York: Productivity Press.

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Airline Pricing and Service Management

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