Airlines reveal ticket pricing strategies
- June 29, 2013
- Jan Brueckner, economics professor, is quoted in the Daily News and Bloomberg Businessweek June 29, 2013
From the Daily News:
For most airlines, the emphasis is on the latter. The goal, almost always, is to make the most money. If that means not every seat is taken, so be it… By now, you would think passengers would have figured this out. And at some level, they have. Fliers understand they won't pay the same as the person sitting next to them, and they have come to accept that. But the way airlines price tickets — the crazy wrinkles that cause prices to rise and fall constantly — still confuses all but the most perceptive travelers. And as computer systems improve and algorithms become more sophisticated, it becomes even more complicated… "Most people know that the earlier you buy it the better," said Jan K. Brueckner, professor of economics at the University of California, Irvine. "The idea is to use some mechanisms to segment passengers into different groups that have different price sensitivities, and to charge different prices to these different groups." Late-booking business travelers, then, get stuck with the high fares, while leisure passengers pay less.
For the full story, please visit http://www.dailynews.com/news/ci_23567540/airlines-reveal-ticket-pricing....