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Author Topic: annual fare rises?  (Read 596 times)

mean123

  • Former member
annual fare rises?
« on: October 15, 2012, 01:15:59 AM »
Does anyone raise fares annually or anything like that? I'm interested to know if that's a Good idea

Offline Andre

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Re: annual fare rises?
« Reply #1 on: October 15, 2012, 01:59:42 AM »
You should reset your prices once a year to keep up with the inflation. I know a lot of people do that.  :)

Offline EsquireFlyer

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  • Posts: 1327
Re: annual fare rises?
« Reply #2 on: October 15, 2012, 02:59:42 AM »
I don't do a reset because that messes with my route-specific markups/discounts, but I do an annual fare hike of maybe 1% or 2% per year to keep up with inflation.

Offline Mr.HP

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  • Posts: 2730
Re: annual fare rises?
« Reply #3 on: October 15, 2012, 05:55:53 AM »
I review my price every weekend. Put some premium or discount on specific routes. Then increase everything 1%  ;D

Offline Sami

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    • AirwaySim - Are you the next Richard Branson?
Re: annual fare rises?
« Reply #4 on: October 15, 2012, 06:13:13 AM »
Forget inflation and other such things, but aim for maximum prices and optimum LF instead (= maximum profits). Usually this is around 75-85% LF...

Offline Troxartas86

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Re: annual fare rises?
« Reply #5 on: October 15, 2012, 06:49:06 AM »
In my experience, you either gradually raise prices one way or another or you will go bankrupt within a decade. Expenses will rise and you have to keep up with them.

Offline Mr.HP

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Re: annual fare rises?
« Reply #6 on: October 15, 2012, 07:56:00 AM »
Forget inflation and other such things, but aim for maximum prices and optimum LF instead (= maximum profits). Usually this is around 75-85% LF...

Sure thing. And I think AWS need more tools adjusting the price. Like:
- Adjusting price of all checked (high LF) routes (in Manage routes)
- Adjusting price of all routes served by fleet X
- Adjusting price of all routes which have LF below/above Y%

Otherwise, people have to do micro management, or they have to adjust the whole thing

brique

  • Former member
Re: annual fare rises?
« Reply #7 on: October 15, 2012, 10:20:04 AM »
Its not necessarily an either 'micromanage' or 'general price changes' : once you have tweaked each specific route price into the 'profit sweet spot', as Sami mentions above (and it does exist, just takes a bit of work finding is all), then overall price changes work well enough to cover seasonal demand factors (the new year slumpette) or to increase revenue to cover inflation of expenses. I tend to do a spot-check of routes fairly often and tweak any that need it : just order the routes by LF and you see easy enough which can stand a hike and which need a decrease to stay in the target range : then each quarter, maybe do an overall tweak, mostly up, but at xmas, a down to anticipate that new year thang.

It is worth doing : a average 10% gain on your pricing isn't just an extra 10% on revenue, which is welcome enough : almost all of that 10% goes to pre-tax profit, and adds up to serious income.

 

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