Variances in Airline Ticket Prices

variances airline ticket pricesLiberalization and deregulation has led to profound changes the airline industry. Diminished governmental influence stimulated airlines to increase their revenues gained by the sales of tickets. Nowadays, airlines issue tickets that are characterized by a great diversity of restrictions to achieve demand segmentation. Most of the current airlines apply complex revenue management systems to determine their ticket prices. These widely applied systems enable airlines to maximize their seat inventory as well as optimizing the charged price for each customer segment. Basically, airlines are charging a wide range of fares to a great diversity of customers for – what is in essence – an identical product.

This paper aims to illustrate the effect of market concentration and competitive forces on the airline ticket price variance. In addition it provides insight in the main drivers causing ticket prices to disperse. Potential groups of interest for this paper include aviation professionals,students and airline passengers, will gain a thorough understanding of the fundamentals in ticket price variances.

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