Airline fare product design in the context of yield management
by Theodore C. Botimer
International Journal of Services Technology and Management (IJSTM), Vol. 1, No. 1, 2000

Abstract: With the advent of computerised yield management systems, the pricing and marketing of airline services have changed. The naive view of airline pricing which considers all prices to be dictated by the market must give way to a broader perspective which identifies the synergistic functions that pricing and yield management departments serve in airline marketing. This paper demonstrates that, while the allocation of airline seats when demand exceeds supply necessarily results in passenger service denials, an effective design of the bundles of price level and purchase restrictions, or fare products, can improve airline performance by enhancing revenue and delivering a higher level of service to many of the most valued customers.

Online publication date: Fri, 04-Jul-2003

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