Airline Pricing And The Game Of Yield Management - 1107 Words

Airline Pricing and the Game of Yield Management For the past few decades, the airlines are looking for the possibility to improve their yield management to maximize their profit. In order to achieve it, they have started to develop the yield management analysis, to understand the best time to sell the flight tickets with higher or lower prices, so, helping them to decide properly. How can airline companies improve their yield management in order to increase their profit without demand analysis? According to the OpenStax College, economists have defined the term demand as â€Å"the amount of some good or service consumers are willing and able to purchase at each price . . . [and] based on needs and wants . . . [and] based on an ability to pay† (2014, Demand for Goods and Services section, para. 1). Thus, is possible to consider the demand analysis as a useful tool which airline companies can adopt to fully understand the main microeconomic aspects that are being affected by the behavior of their customers and also, their final results. This paper intends to examine whether the elasticity of demand plays a role in profit maximization, whether the practice of business behavior pricing is reflected in the principles, and how price discrimination helps airline companies to reach their objective in profit maximization. A way to comprehend the connection between the elasticity of demand and the profit maximization, it is needed first to conceptualize the ‘demand’ in terms of economicShow MoreRelatedAmerican Airlines Case Study1780 Words   |  8 PagesIntroduction This case study is about competition between American Airlines (AAL) and other airlines, as well as the way AAL behaved in the face of new entries of low cost carriers (LLC) at AAL’s Dallas Fort-Worth (DFW) hub. 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