Wednesday, March 08, 2006

Airfares are Not Fair

As an international student, I have a lot of chances to take airplanes and spend a fortune on tickets. As we know, the amount of money that people pay for their tickets for are quite different, even for the exactly same flight.
As it is mentioned in the article attached, there are several aspects that airlines have to worry about when they set their price policy. Unlike other industry, the marginal cost (variable cost for one more passenger) is very low but the fixed cost of operating the flight is really high. Also, the closer to departure, the more desperate the airline would like to sell their seats. There comes a contradiction. Airlines would like to charge high prices for this kind of “last minute” tickets because “must travel” passengers are always the demanders. However, airlines are also happy to sell those “last minute” tickets at lower price to attract those who would like to travel only if they see an unbelievable bargain fare.
Another aspect that airlines have to consider is reasons that people go traveling. Some people fly because they have to for business, for emergency or for convenience. Others fly just when airfares are cheap enough to attract them. On the other hand, some fights are simply more popular than others, maybe because of time or day of week, maybe because of specific flight course. For instant, flight on Friday is always more popular than its counterpart on Tuesday.
Do you have any creative ideas about how to set airfares? Remember, the airlines would like to sell as many tickets as possible per flight and at as high an average fare as possible.

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