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Author Topic: Question about pricing  (Read 454 times)

daviddanser

  • Former member
Question about pricing
« on: November 19, 2014, 07:52:24 AM »
I have a question about pricing of routes, i read the manual but i am not quite sure.
What i get out of the manual is that pricing needs to be good depending on your company image and comfort levels, so your pricing needs to be according to that.
What i do now is have my prices -15% on routes with competitors so that passengers will choose my airline. But what i get from the manual is that this will not work ? Can someone confirm this, because it seems like the passengers are still equally shared between the airlines.
Let's say i have the same comfort level and image as airline B, but my prices are -10% lower.. (His prices are also at a good level according to his image and comfort) will the passengers be equally shared or will the majority pick my airline ?

I hope someone can clarify this for me, it will completely change my strategy...

Offline ajalil

  • Members
  • Posts: 61
Re: Question about pricing
« Reply #1 on: November 19, 2014, 12:37:26 PM »
Hi,

I have only been playing for about a week, so I'm not totally sure about game settings, how ever I have figured out this.

I started a route where 2 airline's were in competition already. On the route planning, thumbing through route options etc, I somewhere found an "average" price for the route (considering the competitors). I have not been able to find the average price since.. how ever it helped me then.

To enter the market, I put myself 20% below the average, but only 1 flight where I could have capacity of two according to demand. I also started Route Spesific Markting on all channels but only for 1 month (so it doesnt cost too much).

Once my seat factor started getting more then 50, I started raising prices 5$ a week until seat factor increase almost stopped. Then I put it down 5$ again. So far my SF has been stable around 80-85% even after starting two flights. Route image is still at 75 and I am still marketing the route.
Regards,

Ajalil

Offline Mr.HP

  • Members
  • Posts: 2730
Re: Question about pricing
« Reply #2 on: November 19, 2014, 03:14:15 PM »

What i do now is have my prices -15% on routes with competitors so that passengers will choose my airline. But what i get from the manual is that this will not work ? Can someone confirm this, because it seems like the passengers are still equally shared between the airlines.

AWS pax is not very price sensitive, that means if you decrease your price by 15%, don't expect to get above 5% pax from competitors, with everything else equal. You might ask why is it? Because if pax is price sensitive, mega airlines will easily push smaller ones out of the business


Let's say i have the same comfort level and image as airline B, but my prices are -10% lower.. (His prices are also at a good level according to his image and comfort) will the passengers be equally shared or will the majority pick my airline ?

I hope someone can clarify this for me, it will completely change my strategy...

Maybe 3-5% extra pax, and is not worth the low price

Hi,

I started a route where 2 airline's were in competition already. On the route planning, thumbing through route options etc, I somewhere found an "average" price for the route (considering the competitors). I have not been able to find the average price since.. how ever it helped me then.

Just use default price


To enter the market, I put myself 20% below the average, but only 1 flight where I could have capacity of two according to demand. I also started Route Spesific Markting on all channels but only for 1 month (so it doesnt cost too much).

Once my seat factor started getting more then 50, I started raising prices 5$ a week until seat factor increase almost stopped. Then I put it down 5$ again. So far my SF has been stable around 80-85% even after starting two flights. Route image is still at 75 and I am still marketing the route.

I don't recommend route marketing, as the result is far too little for the price pay. Also, pay attention to your marketing cost, never put more than 10% of your total revenue in marketing. I recommend 5% for a steady growth of CI. If you have any routes with > 85% LF, try to raise the price by 5%

daviddanser

  • Former member
Re: Question about pricing
« Reply #3 on: November 19, 2014, 03:33:16 PM »
tnx mr.HP i will go back towards average pricing, seems i could make more money that way!

Offline gazzz0x2z

  • Members
  • Posts: 1382
Re: Question about pricing
« Reply #4 on: November 19, 2014, 08:18:45 PM »
it's a game of trial & error. Try what works & what does not. Take notes. Be sure, also, that as long as route image is not 100%, there is no definitive rule, as what is true now will be false tomorrow...

 

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