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Airline Pricing

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Airline Pricing
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AIRLINE PRICING 2
Choose three airlines and compare/contrast the different pricing strategies they are
following.
According to the article, I will discuss Ryanair, SpiceJet, and Emirates airlines.
The growth of technology has contributed to the high demand for air transport. Most
travelers opt to fly to various destinations than road transport. Ryanair uses the cost-based
pricing method. The price is derived by adding the profit percentage with the cost of making the
product. Ryanair charges separate fees for travelers. There is no food and beverages offered;
hence, the travelers should incur. Other costs that travelers should part with are charges for
excess luggage and wheelchair services. The total cost of traveling is thus added through the
services provided by the airline. Ideally, the original charges for traveling are less, but with
additional expenses on luggage and refreshments, the prices hike.
SpiceJet uses competitive pricing, where the price is determined by evaluating the market
charges of rival companies. SpiceJet competes with Kingfisher and Air Deccan to command the
share in the market. In India, there is a high demand for air travel. SpiceJet hence has adopted
improvements on in-flight services and enmities such as refreshments. It also opts to search for
customers via the internet, which is a competitive advantage.
The Middle East Emirates airline uses value-based pricing method. This entails setting
the price based on customer satisfaction. The airline has attracted a large percentage of travelers
because of the quality and unique services provided. Emirates offers services such as flying
nannies, first-class bars, and onboard shower. These are exceptional services that cannot be
easily employed by competitors. The travelers would be willing to part with high prices to enjoy
the services.
However, pricing among the three companies has been affected by increased demand for
air transport. Many people have the desire to use their services which are fast and efficient.
Therefore, it’s important to note that the pricing strategies employed by the airlines have been
influenced by demand for services.
What benefits do airline customers seek when they buy air travel tickets?
Customer needs and preferences vary. The airline travelers thus have various choices
when booking tickets. First, they consider whether the plane is efficient and is bound to follow a
strict timetable. No traveler would choose an airline that delays for an hour because of a
technical problem. The customers also consider if there are additional charges for their luggage.
Some airline companies carry luggage for free while others remit high charges. Again, travelers
consider the provision of refreshments. They would opt to choose the airline that offers
customers with free food and drinks rather than buying. Lastly, customers choose the airline that
provides unique services such as bar services, pool games, hot shower, and flying nannies.
What external and internal factors affect airline pricing decisions?
Competition is one of the external factors affecting airline pricing. When several airlines
are operating on similar routes, the prices should be kept competitive. Demand for flights is also
an external factor affecting pricing. When the demand is high, the prices increase e.g., on
weekends and holidays. Low demand conversely leads to low prices. The cost of maintaining an
airline is an internal factor that affects pricing. If the operational and maintenance costs are high,

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Running head: AIRLINE PRICING Airline Pricing Student’s Name Institution Affiliation AIRLINE PRICING 2 Choose three airlines and compare/contrast the different pricing strategies they are following. According to the article, I will discuss Ryanair, SpiceJet, and Emirates airlines. The growth of technology has contributed to the high demand for air transport. Most travelers opt to fly to various destinations than road transport. Ryanair uses the cost-based pricing method. The price is derived by adding the profit percentage with the cost of making the product. Ryanair charges separate fees for travelers. There is no food and beverages offered; hence, the travelers should incur. Other costs that travelers should part with are charges for excess luggage and wheelchair services. The total cost of traveling is thus added through the services provided by the airline. Ideally, the original charges for traveling are less, but with additional expenses on luggage and refreshments, the prices hike. SpiceJet uses competitive pricing, where the price is determined by evaluating the market charges of rival companies. SpiceJet competes with Kingfisher and Air Deccan to command the share i ...
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