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Optimizing airline fare structures

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  • Octavian Oancea

    (Etihad Airways)

Abstract

Optimizing an airline’s fare structure has always been reliant on the expertise and market awareness of its Pricing professionals. Whether in the traditional airline world—with restrictions aiming to “fence” high-yield customer segments from the leisure ones, in the low-cost carrier competitive world with more simplified fare structures, or in the new world of dynamic offer generation and continuous pricing, how to establish the entry level price and all other prices, as well as the appropriate conditions associated to a price remains a challenge for any airline Pricing department. In this article we explore some of the common airline practices for determining fare levels and fare rules, as well as what the future holds for this field in the context of IATA New Distribution Capability, where offers will be generated dynamically, pricing could be continuous and traditional booking classes might not exist.

Suggested Citation

  • Octavian Oancea, 2020. "Optimizing airline fare structures," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(4), pages 230-233, August.
    • Handle: RePEc:pal:jorapm:v:19:y:2020:i:4:d:10.1057_s41272-020-00248-0
    DOI: 10.1057/s41272-020-00248-0
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    References listed on IDEAS

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    1. Octavian Oancea & Razvan Horga, 2018. "The new wave of airline revenue and pricing management – what next for the leisure customer?," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 17(3), pages 182-188, June.
    2. Thomas Fiig & Remy Guen & Mathilde Gauchet, 2018. "Dynamic pricing of airline offers," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 17(6), pages 381-393, December.
    3. Michael D. Wittman & Peter P. Belobaba, 2019. "Dynamic pricing mechanisms for the airline industry: a definitional framework," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(2), pages 100-106, April.
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    Cited by:

    1. Octavian Oancea, 2021. "The implications of behavioural economics for pricing in a world of offer optimisation," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(6), pages 626-633, December.

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