Price Differentiation and Yield Management in the Airline Industry

Seminar paper from the year 1998 in the subject Business economics - Supply, Production, Logistics, grade: 1.2, The University of Sydney, language: English, abstract: This paper discusses the practice of price differentiation in the airline industry and how airlines use yield management systems to control their different prices. Consequently it is explained how price differentiation is realised. Emphasis has been laid on discussing whether price differentiation is discriminatory and why it should be acceptable, even if it is discriminatory. In the second part the principles of yield management are explained and the major challenges with regards to the latest developments in electronic commerce are reviewed.