Pricing Strategies of United Airlines

After keeping track of the fares being charged, I realized that there was a major variation especially between Las Vegas and Chicago. I got to know that the major reason for the fare variation was because of the demand and supply of customers. The constant changes especially to do with competition, demand for particular seats including the current fuel prices are of major concern. As Robinson (2009) found out that anytime major flights show competition for a particular route, then the prices automatically changed in order to have an impact in the marketplace.

There is a common trend with Airlines where they tend to employ a very high-tech strategy known as the ‘‘yield management’’. The main aim of this strategy is to charge passengers differently so as to have additional revenue for every flight that is departing. Here the fares go up when there are many customers who want to travel then go down when the number of customers to travel is less. Airlines always want to make profits and therefore that’s why they end up having fare variations depending on the availability of customers. Due to this reason, a customer who gets their ticket late especially on the last minute ends up paying more compared to those that got their tickets in advance. Kendrick (2006) discovered that this is a very effective way of the airline managing to achieve maximum performance taking into consideration the flights taken within a particular period of time.

What Pricing strategies does United Airlines apply?

United Airlines use other pricing methods so as to beat the steady competition. Anytime there is completion in one route, United Airlines lower their prices as a way of enticing more customers. This way, many customers end up choosing to travel in their Airline, hence the company ends up having many flights. Additionally, a slight variation of fares is also applicable though it depends on the distance to be covered so as to ensure there are maximum yields achievable in each and every flight. So as to improve on the results, the Airline charges normally so as to make sure that there are constant flights on board (Burns, 2013).

References

Burns, P. (2012). Corporate entrepreneurship: innovation and strategy in large organizations. Macmillan International Higher Education.

Kendrick, T. (2006). Developing strategic marketing plans that really work: A toolkit for public libraries. London: Facet.