Please read the attached case study “Revenue Management at American Airlines“ and answer these three questions as a case report essay NOT AS question following answer.
- Make a list of some of the issues that will need to be resolved if American Airlines decides to routinely charge different prices to customers in the same class of service.
- Would you expect these revenue management techniques of charging differential prices based on the target customers’ willingness to pay for change order responsiveness, delivery reliability, schedule frequency, and so forth to be more effective in the trucking industry, the outpatient health care industry, or the hotel industry? Why or why not?
- Sometimes when reservation requests by deep discount travelers are refused, demanders take their business elsewhere; they “balk.” At other times, such demanders negotiate and can be “sold up” to higher fare service like United’s Economy Plus. If United experiences fewer customers balking when reservation requests for the cheapest seats are refused, should they allocate preexisting capacity to protect fewer seats (or more) for late‐arriving full‐fare passengers?
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