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Q: Business Financial ( Answered,   1 Comment )
Subject: Business Financial
Category: Business and Money > Finance
Asked by: spikey003-ga
List Price: $2.00
Posted: 22 Sep 2006 00:20 PDT
Expires: 22 Oct 2006 00:20 PDT
Question ID: 767510
What is the term for the the Selling tickets tickets cheaply in
advance and full price nearer the cut off period. Similar to the
Easyjet philosphy. There is a proper financial term for this?
Subject: Re: Business Financial
Answered By: jackburton-ga on 22 Sep 2006 01:07 PDT
Hi spikey003,
I believe the term you want is "price discrimination", specifically
"third-degree price discrimination".
"EasyJet and British Airways have different approaches to selling the
same product for different prices, both are examples of third-degree
price discrimination. The budget airline 'Easy Jet' sells all their
seats over the internet - the earliest booked seats are the cheapest.
Then as demand rises and supply becomes more finite, the prices are
raised, so prices are discriminated with passengers on a given flight
often paying very different prices for their seats."
"In fact, in the airlines sector, firms go in for third degree price
discrimination and segment the market, charging a higher price to the
market with a relatively inelastic demand (such as fares between
business and economy class travellers, or between emergency travel and
leisure travel by providing apex fares). The low cost airlines follow
this different pricing strategy. Customers booking early with carriers
such as Air Deccan will normally find much lower prices if they are
prepared to commit themselves to a flight by booking early, on the
justification that consumer?s demand for a particular flight becomes
more inelastic the nearer to the time of the service."
Definition of price descrimination:
Hope this helps.
Search term used:
sell tickets price increase time "business terms" 
"price discrimination" easyjet
Subject: Re: Business Financial
From: tonylennon-ga on 22 Sep 2006 08:10 PDT
While airlines do practice "price discrimination", for example the use
of differential pricing between business and economy passengers, the
more accurate term for Easyjet's pricing policy is "yield management".

Tony Lennon

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