ABSTRACT
The financial community should have a more unbiased view but in the author's experience has historically been more eager to blame labor than management, with whom it seems to feel more kinship. The basic theory of yield management is simple and logical. People have a different degree of willingness to pay for goods, including transportation, which is evident in the basics of the demand curve. The basic tenet of yield management is that business travelers are extremely price inelastic, while leisure people exhibit a high degree of price elasticity. As the premiums increased, yield management became a battle of wits between the airlines, which wanted to price discriminate, and business people, who did not want to be identified as those passengers willing to pay much more than the average traveler. The result was that yield management techniques created countless different fares in order to confuse passengers and prevent them from 'cheating' by purchasing leisure tickets.
