Economics Essay Example | Topics and Well Written Essays - 2500 words - 1

Economics - Essay Example It was noted that ticket prices are relatively higher in 1978, wherein passengers disburse 19 cents per mile. As compared to the present price, which is 14 cents per mile, it is relatively higher. Thus, there is an increase in the influx of passengers (Bonsor, 2006). Airfare prices and travel time are considered the most important factors for passengers as compared to in-flight amenities. As William O’ Conner, an economist stated that â€Å"The speed, comfort, and safety aspects of the journey, whichever airline a passenger selects, are more likely to be the same† (1995). Thus, the amenities are not the priority of passengers in choosing the flight. People based their choice of flight on factors such as having the cheapest ticket price at the same time having the most convenient times of departure and arrival. The consequence is for airlines to increase the number of flights for a certain routes and maintain the price like the competitors (Kons, 2000). Reservation system serves a crucial role in an airline company. By being able to predict the passenger’s need and willingness to pay, the system sets up the scheme of pricing and setting from which passengers have no control on the differences the prices of tickets belonging t o even the same class (Watson, 2004). Pricing of airline tickets is a very complex process that is affected by various factors and considerations. These include the date of purchase and reservation wherein tickets bought several months before the flight schedule is normally lower in price than when it is purchased a day before the flying date. Normally these trend is known to the flying public and for those who wanted to grab these opportunity of buying cheaper tickets they will get one especially those people who travel regularly every week and month. Seat classification or the class is another factor being