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Why sometimes price show inconsistencies. when I increase the price the Y class pax would increase but when I cut the price the pax would decrease dramatically. It is not consistent with price and demand theory
Price Inconsistence
Started by way_tp, Nov 03 2011 02:41 AM
#1
Posted 03 November 2011 - 02:41 AM
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#2
Posted 03 November 2011 - 08:21 AM
richee
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As far as I know it is consistant, but keep in mind that there are more airlines folowing the same route so maybe this is your problem.
The same is true when they change theyer prices to. This can happen at the same time (happens to me once).
The same is true when they change theyer prices to. This can happen at the same time (happens to me once).
#3
Posted 03 November 2011 - 09:25 AM
It happen when there is no competition at all bro. as example when put the price in $1300 the pax is about 80% but when I cut down the price to $1200 to maximize the pax, I often get my pax down to about 40%-50%. It often happen to my new route.
#4
Posted 09 November 2011 - 05:58 AM
I actually experienced the same thing...
but in the end, i choose the highest profit no matter the LF isnt 100%..
but in the end, i choose the highest profit no matter the LF isnt 100%..
No, you're not home. You're flying with us.
#5
Posted 21 November 2011 - 01:44 PM
ArthurB
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#6
Posted 21 November 2011 - 04:56 PM
It happen when there is no competition at all bro. as example when put the price in $1300 the pax is about 80% but when I cut down the price to $1200 to maximize the pax, I often get my pax down to about 40%-50%. It often happen to my new route.
What's the default price for that route?
#7
Posted 21 November 2011 - 10:45 PM
I always figure this was an in-built feature. The idea being that given a route between two cities with 150 seats per flight that with only one flight per day to chose from, you must offer the lowest price to entice people to fly. When you offer a better time, you can increase the price because the time will better fit the passenger's schedule, and the remaining seats on each flight will be sold at a higher price to those with flexibility, but can't find a cheaper seat.
This was documented in a 1993 FAA report, and called the "Southwest Effect". In short, if a single airline operates on a market, and then another joins the same market with more supply, the incumbent airline can then raise it's price and take the additional 'premium' passengers that have been enticed to fly by increased frequencies available.
In that respect, I would not call this a bug, but completely expected and well modeled.
This was documented in a 1993 FAA report, and called the "Southwest Effect". In short, if a single airline operates on a market, and then another joins the same market with more supply, the incumbent airline can then raise it's price and take the additional 'premium' passengers that have been enticed to fly by increased frequencies available.
In that respect, I would not call this a bug, but completely expected and well modeled.
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