Published at Sunday, March 31st, 2019 - 15:35:11 PM. Type of airline. By Ailse Hahn.
A complicating factor is that of origin-destination control ( O&D control ). Someone purchasing a ticket from Melbourne to Sydney (as an example) for A$200 is competing with someone else who wants to fly Melbourne to Los Angeles through Sydney on the same flight and who is willing to pay A$1400. Should the airline prefer the $1400 passenger or the $200 passenger plus a possible Sydney-Los Angeles passenger willing to pay $1300? Airlines have to make hundreds of thousands of similar pricing decisions daily.
Most airlines use differentiated pricing a form of price discrimination to sell air services at varying prices simultaneously to different segments. Factors influencing the price include the days remaining until departure the booked load factor the forecast of total demand by price point competitive pricing in force and variations by day of week of departure and by time of day. Carriers often accomplish this by dividing each cabin of the aircraft (first business and economy) into a number of travel classes for pricing purposes.
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