ABSTRACT
Revenue, alongside costs, represents the only available channel for firms to effect profits. Still, not all firms have control over their revenues. In regulated industries such as electric utilities assigned to a given service territory, there is little that the single utility can do to influence its revenues. Firstly, the service territory defines the demand area, and there is no possibility to expand beyond this zone. Secondly, regulations establish the maximum prices that can be charged to customers and the firm cannot exceed these. Meanwhile, in North America, revenue management systems emerged following the deregulation of the airline industry in the USA in the late 1970s. American Airlines, which was facing fierce competition, introduced discounted fares in April 1977 to segment its market between leisure travellers and business travelers.
