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Optimal pricing ladders for the sale of airline tickets

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Pricing ladders are widely used in the airline industry to define the discrete set of prices that can be charged for seats on a flight. We consider the factors that affect the setting of these ladders for one-way economy tickets. The minimum and maximum fares are assumed to be fixed and we focus on maximising the revenue generated on a flight by changing the spacing of the intermediate fares. Three scenarios are considered for the market: single flight with perfect market segmentation and imperfect market segmentation and multiple flights on one route.Journal of Revenue and Pricing Management (2009) 8, 96–106. doi:10.1057/rpm.2008.24; published online 27 June 2008
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Document Type: Research Article

Publication date: 2009-01-01

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