Decryting Airline Pricing Strategy 2023

Abstract

The Airline industry is one of the most competitive sectors involving very complex and time-consuming pricing strategies. The case tries to explain the traditional and latest pricing strategies employed for Airline sales. The case draws a parallel with traditional commodity sales. The Case discusses the Airline industry's existing practice of fixed pricing strategy. It introduces the New Technology disruptions happening in pricing strategy. With the advent of the internet boom and electronic retail, Airlines have tried to utilize the best technologies they can offer to manage sales with 2 main objectives. One, maximize the utilization by converting as much as searches to sales. Second, maximize the yield, by trying to offer differentiated products to cater to consumer needs. As a reader, one will be able to understand the nitty-gritty of Operational Management along with the reasons behind the different pricing strategies employed. While the Airline uses a lot of personal information gathered by different channels to customize the offers, it also touches upon the ethical issue of customizing prices based on customers. It helps the reader to understand, how Machine Learning technologies can be employed to make some of the complex decisions on forecast and revenue maximization. The practical exercise is aimed at enabling readers to appreciate why product differentiation is critical, also how to maximize revenue even with a limitation of product or capacity. The readers also get a basic concept of different pricing strategies and enable critical thinking into ethical issues of using customer data for differentiating the same product based on customer needs. The use of AI or Machine learning techniques to improve operational management can be applied to the Hotel and Hospitality Industry, Movie or Event management.

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