Airline Pricing, Demand and Output Determination

Question 1

What is No-frills Airfare?

Answer 1

Same definition as LCC (Low Cost Carrier)

Question 2

What is peak and off-peak pricing?

Answer 2

Peak Pricing happens when majority of passengers prefers to go on a particular time (price increases)
Off-Peak Pricing are cheaper, they are times when it is not busy

Question 3

What is the objective of an Inventory Management?

Answer 3

to maximize individual flight revenues & minimize cost

Question 4

What is Direct Operating Costs?

Answer 4

To reduce operating costs as much as possible

Question 5

Give example of Indirect Operating Costs

Answer 5

Station and ground expenses
Passenger service costs
Sales and promotional costs
General and administrative costs

Question 6

What is Variable costs?

Answer 6

Costs that increase with the level of output that an airline produces

Question 7

What is Fixed costs?

Answer 7

direct operating costs that do not vary with change in ASMs (Available Seat-Miles)