Question

A recent study by economists Steven Puller and Lisa Taylor found that airline tickets purchased over the weekend were priced 5% lower on average.

Q: Why would airlines charge lower prices to customers making bookings on the weekend? Q: How would budget airlines (for instance Spirit Airlines, Sun Country Airlines, or no-frill airlines) compete against full service airlines (Delta, AA, United, etc.)?

Answer 1

Airlines charges lower prices to customers that make bookings on weekends. This is because, people in large numbers want to travel for leisure purpose over weekends. Lowering of price attract customers to choose flight as medium of travel vis-a-vis road or rail or water route. Since, booking is high, the airlines tends to register record profit though maintaining lower profit margin per passenger per flight.

Budget airlines like Spirit Airlines , Sun country Airlines compete against full service airlines in following ways:

1) Brand-positioning as lowest cost carrier and non-stop carrier drive to important tourist destinations and first-choice of destination travellers

2) Offer routes on seasonal basis to fit specific demand pattern

3) Charging low fee or no fee for specific luggage size while travelling for holidays

4) By promoting usage of specialized airline specific credit cards that provides great offers , gifts and discounts on travel and luggage

5) Not charging extra fee while passengers making a choice of the seat

6) By providing low cost flight options for one-way journey and no unnecessary clause like minimum stay and on top of it, promising a comfortable travel by offering complementary beverages and inflight entertainment.

7) By providing no-change fee or minimal change fee in special scenarios