ABSTRACT
This chapter explores the implications of the trends on airline pricing policies and examines the balance between passengers' desires for value, choice and simplicity and any airline's need for sustainable long term profitability. Some low-cost, low fare airlines will find a way to make service in the intercontinental markets work. Despite liberalization of the global airline industry to varying degrees in various parts of the world, with the exception of Southwest's operations in the United States, passengers have had limited price-service options until the beginning of this century. Business passengers found the fare structure to be unfair because it forced them to purchase full fare tickets at prices up to ten times the level of discounted tickets. Passengers have major issue in pricing, especially for international code-shared flights: Seats on the same airplane can be sold for wildly different amounts by different partners. The final element in the pricing strategy relates to the role of branding.
