Several airlines are implementing higher prices for passengers traveling alone as a way to increase their traditionally reduced profit margins. This new approach, recently detected by The Economist newspaper, applies mainly to US companies and mainly affects those who travel alone in professional or leisure travel, because they are unable to take advantage of reduced rates associated with group or family reserves. Practice is part of a broader strategy known for “price discrimination”, common in the aviation sector.
Tariff barriers as a method for increasing profits
Airlines have appealed to the concept of so -called tariff barriers to apply different tariffs, taking into account certain specific criteria.
Among these criteria are, for example, whether or not the trip takes over over the weekend, and it is usual that passengers on business travel, which are not over the weekend, pay higher prices. The introduction of the highest fare for individual passengers follows this same principle, the newspaper indicates.
This model allows the carriers to effectively segment the market, exploring the greater availability of certain passengers to pay higher rates.
This is a widely tested technique that, according to the above source, helps companies maximize revenues in high demands or with customers with higher purchasing power.
The consequences of the new tariff practice
This new approach can mean a significant increase in costs for lone travelers, especially on more group passengers traveling routes.
The impact, according to the same source, will be particularly felt by those who make last minute trips, a traditionally more profitable segment for airlines.
For passengers, especially in professional contexts, financial consequences can become relevant. In practical terms, those who travel alone will eventually subsidize the lower rates applied to groups in a way, refers to the same analysis.
It points out that while the phenomenon has been identified mainly in the United States, it may extend to other markets, given the trend of airlines to replicate successful tariff strategies in other regions.
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