Keeping up With the Competitive Pricing Strategies in the Aviation Industry | Infiniti’s Latest Blog Reveals Some of the Common Pricing Strategies of Airline Companies

A well-known market intelligence company, Infiniti Research, has announced the completion of its latest article on the aviation industry. This article examines some of the common pricing strategies used by airline companies.

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Competitive pricing strategies in the aviation industry. (Graphic: Business Wire)

Disparity in pricing is a frequent practice followed in the aviation industry. As much as it might seem unfair, the aviation industry has one of the most dynamic pricing strategies compared to any other sector. One of the most common pricing strategies in the airline industry is demand-based pricing. During festive seasons or other times of high demand, the airline prices are often at its peak, and during the off-season, the same tickets are priced at much lesser rates. Apart from this, there are several other pricing strategies that airline companies often follow.

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Total customization

The standard price division in the aviation industry is based on the classes including economy, business, and first-class. However, airlines also have dozens of subdivisions. The airline carriers usually adjust the number of seats allocated to each fare class. When one class gets sold out, the sale price will leap to the next one. Firms in the aviation industry aim at knowing their customers better through loyalty programs, registered users, and cookie tracking since it would help them to offer personalized pricing.

Competitive pricing

Companies in this airline sector have become increasingly complex and fiercely competitive over the past few decades. The growth of the airline network and the drop in the cost of commuting has taken revenue management to whole new levels of complexity. Airline companies have realized that pricing strategies such as Expected Marginal Seat Revenue (EMSR) offer the best ways to optimize fares in real-time. This technique is useful not only on a given route but taking into account revenue-generating opportunities across the whole airline network.

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Customer profiling

Airline companies usually make some reasonable assumptions about the profile of traffic on a particular route and then alter their prices accordingly. If the airline assumes that passengers traveling to leisure destinations will tend to book relatively before their holidays, it may start pricing seats on that route relatively high. Based on the market response, the prices would then be altered accordingly.

Brand image

The rising competition in the aviation industry gives carriers good enough reasons to not overcharge customers. However, they must be careful not to undercharge customers as well. Airlines tend to aggressively lower prices when there are still empty seats left before a flight departs. However, if this becomes the norm, there could be a serious risk of undermining the brand and alienating higher-value passengers.

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About Infiniti Research

Established in 2003, Infiniti Research is a leading market intelligence company providing smart solutions to address your business challenges. Infiniti Research studies markets in more than 100 countries to help analyze competitive activity, see beyond market disruptions, and develop intelligent business strategies. To know more, visit:https://www.infinitiresearch.com/about-us

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