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Designing and Pricing Services Based on Customer-Perceived Value: An Airline Company Feasibility Study

Author

Listed:
  • Emmanuel Fragnière

    (Haute École de Gestion de Genève, University of Applied Sciences Western Switzerland, CH-1227 Carouge Genève, Switzerland; and School of Management, University of Bath, Bath BA2 7AY, United Kingdom)

  • Angela Lombardi

    (Lombardi Consulting Ltd., Xemxija, SPB 3921, Malta)

  • Francesco Moresino

    (Haute École de Gestion de Genève, University of Applied Sciences Western Switzerland, CH-1227 Carouge Genève, Switzerland)

Abstract

We propose a new integrated model for pricing airline tickets that takes into account the perceived value of multiple services associated with a given flight. For instance, clients perceive benefits on different attributes such as refund options, baggage allowances, time slots, days of operations, Web check-in services, as well as airline brand. These elements of perceived values are not, to our knowledge, modeled in existing yield management systems. Our integrated model includes a classical aggregate planner for services as well as a share of choice. In this paper, we have worked closely with an airline company and provided it with relevant managerial recommendations.

Suggested Citation

  • Emmanuel Fragnière & Angela Lombardi & Francesco Moresino, 2012. "Designing and Pricing Services Based on Customer-Perceived Value: An Airline Company Feasibility Study," Service Science, INFORMS, vol. 4(4), pages 320-330, December.
    • Handle: RePEc:inm:orserv:v:4:y:2012:i:4:p:320-330
    DOI: 10.1287/serv.1120.0026
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