EAC 2019 - Vienna - Pricing in Aviation: Issues and Innovations Are prices too high, too low or just right?


Pricing in Aviation: Issues and Innovations
Are prices too high, too low or just right?

The aviation sector has a history of developing innovative pricing strategies, first by airlines but also by airports, as governance and regulatory changes have promoted commercial approaches to revenue generation. In a business environment increasingly influenced by digital technology, big data and expanding analytic capabilities, airlines and airports face new challenges in pricing and revenue generation.

Ancillary revenues for airlines have grown to $100bn annually, yet they are not part of fare data published by governments or airlines. How should this be evaluated against the claims of declining real airfares? Airports are facing a decline in non-aeronautical revenues driven by changes in passenger shopping behaviour and innovations in ground transport. What are the implications for aeronautical charges and airport infrastructure investments?

What impacts have alliances, joint ventures and anti-trust immunity had on airfares? What are the underlying economics in the structure of airport charges? Can low cost carriers price to succeed in long-haul markets? Pricing of Air Traffic control has hardly seen any innovation. Pricing fulfills more the function to finance the system without any relationship to the value of the service. Will this change in the near future?

Answers will vary, depending on who you and where you are which airfares are referred to. The perspective on pricing and revenue generation may differ as between airline managers, airport managers, government regulators or an air traveller. Views may also depend on whether you are based in Europe, North America or Asia. Finally the answer to this question may depend on whether we are discussing all airfares on average, long versus short-haul fares, fares by seat class, city pair or route level fares.

Whatever your focus and perspective, pricing and revenue generation in air transport markets are crucial factors in the development and evolution of the industry.

November 6-8 2019


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Category: upcoming activity