Airliner's Pricing Strategies and Perceived Price Fairness

Price discriminatory tools and Yield Management are common practices in the Airline industry. Ever since the deregulation of the airline market, airliners are able to charge prices without government intervention. This paper investigates the effect of the pricing strategies employed by airliners and attempts to explain perceived price fairness by customers exposed to these strategies. The model is based on an extensive literature review about airliner‘s pricing strategies and perceived price fairness. The model suggests that pricing strategies, like Yield Management, have a negative effect on perceived price fairness. However, there are 3 extraneous variables that can weaken or strengthen that relationship: Elasticity of Demand, Lateral Consumer Relationship and Illusion of Control