The mysterious world of airline pricing: innovative practices and strategies for profit
ISSN: 0275-6668
Article publication date: 4 February 2022
Issue publication date: 14 April 2023
Abstract
Purpose
Business success and pricing are very closely intertwined. This study aims to explain how businesses can improve their profitability by relying on creative pricing strategies that managers across industries can adopt.
Design/methodology/approach
This study uses research from related fields and a detailed analysis of the airline industry to deconstruct its success and identify innovative pricing practices that have helped salvage it.
Findings
Based on our analysis, the authors propose several strategies that can help companies control their pricing and leverage it to increase profitability. These include decommoditizing, segmenting the market (up and down), scrutinizing customer behavior, offering versioning and ancillary services, actively promoting these add-ons and using dynamic pricing.
Originality/value
This study takes an unusual approach and look at the airline industry – literally a textbook example of an oligopoly. The authors argue that if companies in an oligopoly – with undifferentiated services – can dig themselves out of the depths of nonexistent profits by using innovative pricing, it should be much simpler for companies in other industries that offer easier differentiation.
Keywords
Citation
Kohli, C.S. and Habibi, M.R. (2023), "The mysterious world of airline pricing: innovative practices and strategies for profit", Journal of Business Strategy, Vol. 44 No. 3, pp. 153-160. https://doi.org/10.1108/JBS-12-2020-0270
Publisher
:Emerald Publishing Limited
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