Air transport is one of the services available in the aviation industry. Air transport concerns moving in the long-distance through airplanes. The charges are determined by factors such as distance, the class level of the flight, additional cargo, and airline brands. The most used method is the segmented pricing. In the approach, consumers are charged depending on their willingness to pay more for the plane ticket. Aviation business has different ways of determining their prices. There are the business class and the first-class plane tickets. The first-class tickets are costly and mostly target wealthy people such as high-ranking politicians, CEOs, and large company owners. The business-class tickets are for regular people, and they are affordable to most individuals. Since air travel is done on a specific schedule, disrupting the schedule may lead to the increased cost of plane tickets, for example, business people flying in mid-week may pay a higher price than during regular travel schedule (Shaw, 2016).
In my opinion, segmented pricing is the correct one in the aviation industry. It increases competitiveness, as the customers will prefer the airplanes offering affordable prices, even flying in mid-week for business purposes (Yayla-Kullu, 2019). It will check issues of over-pricing in the industry. The method is a way of increasing profitability will all the surplus money collected from the increased cost of plane tickets. The approach promotes customer retention since they get the best services at an affordable cost. Customers will choose the company, which has increased the tickets to an affordable price, and since such clients are willing to pay, they become regular clients. Segmented pricing leads to market extension since the planes are willing to fly to different regions on their route since the customers are willing to pay the cost (Pope, Garrow, Guin, Leonard, Bankston, & Campbell, 2009). The approach focuses on the company, creating an effective segment, thus enabling an increase in profits.
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References
Pope, S., Garrow, L., Guin, A., Leonard, J., Bankston, L., & Campbell, P. (2009). Conceptual framework for collecting online airline pricing data: challenges, opportunities, and preliminary results. Transportation Research Record , 2106 (1), 30-37.
Shaw, S. (2016). Airline marketing and management . Routledge.
Yayla-Kullu, M. (2019). Does Competitive Behavior not Mean Lower Prices? Impact of Growing Demand and Limited Seat Availability in Asia-Pacific Commercial Aviation Industry. Journal of Asia-Pacific Business , 20 (1), 48-61.
