ABSTRACT
The policies and practices of US airlines with respect to air travel demand and pricing are both interesting and significant. During the pioneer years of air passenger transportation, the cost of aircraft operation precluded the air carriers from seeking passenger traffic at rates on a price-competitive basis with other forms of transportation. Of all the marketing variables that influence the potential sales of airline seats and cargo capacity, price has received the most attention since deregulation. The law of demand tells the reader that consumers will respond to a price decline by buying more of a product or service. The current literature on pricing describes several different strategies or objectives that a firm might pursue, from simple survival pricing for cash, to fighting for market share, to pricing at a premium over competitors to complement a superior product or service quality. Pricing tactics can be broadly categorized as: fare actions and adjustments to fare rules and/or restrictions.
