Airline Price Discrimination Case Study
Airline companies use price discrimination regularly, as they sell travel products and services .This is frequently caused by assigning content to various booking classes, which sell for different prices and which may be linked to fare restrictions. I will talk over the welfare effects of dissimilar kinds of price discrimination schedules that are employed in the airline industry.
Saud Arabia airline is the flag carrier airline of Saudi Arabia based in Jeddah, It was founded in 1945 70 years ago. It operates domestic and international scheduled flights to over 120 destinations in the Middle East, Africa, Asia, Europe and North America. Airlines companies use price discrimination to help them in increasing their profit. But there are three types of price discrimination, they explained below.
Price discrimination is the practice of charging a different price for the same good or service. There are three types of price discrimination first degree, second degree and third degree price discrimination.
First degree discrimination known as perfect price discrimination it 's occurs when a firm charges a
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Bulk discount to wholesalers means you will get a discount when you buy more than one ticket and that will attract many of the families. Seasonal discounts it’s depends on seasons for example, in the summer people will want to travel a lot so they do a discount to get more profit. Seasonal discount it’s could be in vocations or in particular weather people travel on it a lot. Discounted tickets requiring an advance purchase that’s means when you buy your ticket earlier you will get discount, that’s a good way to attract customers. Almost all the airline companies do a discounted ticket requiring an advance purchase, because it will make them know how much tickets they sell, and how many
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