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Airline Dynamic Pricing: Why It Matters Even More Today

It is only a matter of time before every industry will be back on track as before. But, there is a catch here. Every company and industry must be ready for the change in customer behaviour. The competition to direct demand and increase revenue is going to be intense. <br>Airlines have understood the situation and have realized dynamic pricing makes more sense than ever. It has gained more prominence as it enables airlines to be more competitive. The concept allows an airline to navigate changes in demand & market and strategize price according to the competitive airline, consumeru2019s feasibility, a

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Airline Dynamic Pricing: Why It Matters Even More Today

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  1. Airline Dynamic Pricing: Why It Matters Even More Today Revenue Technology Services

  2. Airline Dynamic Pricing • It is only a matter of time before every industry will be back on track as before. But, there is a catch here. Every company and industry must be ready for the change in customer behaviour. The competition to direct demand and increase revenue is going to be intense. • Airlines have understood the situation and have realized dynamic pricing makes more sense than ever. It has gained more prominence as it enables airlines to be more competitive. The concept allows an airline to navigate changes in demand & market and strategize price according to the competitive airline, consumer’s feasibility, and attributes.

  3. But, what is dynamic pricing? • It is a change in the price of the product or service that reflects the difference in market conditions. In the case of airlines, the rise in the number of travelers, their paying capacity, competition airline price strategy are some factors that influence pricing in the airline industry.

  4. Why does it still matter so much in an airline? • Dynamic pricing does not matter but has become crucial for every airline because online retail is as competitive as ever. It means, to maximize the income, all airlines have to offer the right price and offer to direct demand. Competition is tough. Earlier, there were only a few airlines. But, now people have a choice. The best retailer knows that the real advantage lies in dynamic pricing and not the same price. Do not mistake the definition as offering the lowest price possible. It is about selecting the right price with attractive offers and discounts. The airline is following the same steps.

  5. The AI in airline revenue management calculates price, suggests offers, and tells how much stock (number of seats) is left. It offers airlines the flexibility to perform better and more in less time. They can drive immediate impact by changing the prices, as per the dynamic factors, delivering the power to fix the rate beyond a fixed point.

  6. For Example • For example: Suppose you are willing to pay $250 for a flight. But, the price offered by airline-1 is 200 and by airline-2 is $300. Now, of course, you will go for $200, depriving airline 1 of the possible profit of $50 if it had realized its opportunity to upsell. The same goes for airline 2. • Dynamic price makes revenue managers fix a perfect price that results in an increment in overall revenue.

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