3 Questions Essay Example | Topics and Well Written Essays - 750 words

3 Questions - Essay Example They were able to reduce their first class fares around 20-50% while regular coach fares were cut down by around 38% because of this innovative pricing strategy. Airline travels usually varies based on the seasons and the global political atmosphere. Business people and tourists were the main passengers of airliners and hence their numbers may vary based on the political and seasonal (climatic) variations in the world. So the airliners are adjusting their prices based on these variations in seasons. Another pricing strategy most of the airliners using are the bonuses for the more air miles travelled by the passenger using the same airline. This strategy will prompt the passengers to select the same airline for their future traveling needs in order to utilize the bonuses. Overbooking, discount fare traveling and carefully structured traffic management help the American airlines to ensure maximum passengers in every flight. The customers will often look for more options if the airliners are not flexible enough to reduce their prices. Moreover in a globalized environment the competition is immense in airline industry and hence only the cheaper prices ensure maximum passengers on flights. In every industry the pricing decisions and strategies must be decided based on the competition in the market. In a monopolized market the service provider has the complete freedom over fixing the prices of their product or services where as in a competitive market the pricing decisions and strategies may depend on other suppliers and external environments as well. Airline industry is a highly competitive industry because of the excessive number of private and public air passenger carriers. Most of the airliners experience shortage of passengers most of the times and hence pricing strategies are important for the existence of airliners. In some seasons the airliners will experience busy seasons and hence