Designing and Pricing Services Based on Customer-Perceived Value: An Airline Company Feasibility Study

Emmanuel Fragnière (), Angela Lombardi () and Francesco Moresino ()
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Emmanuel Fragnière: Haute École de Gestion de Genève, University of Applied Sciences Western Switzerland, CH-1227 Carouge Genève, Switzerland; and School of Management, University of Bath, Bath BA2 7AY, United Kingdom
Angela Lombardi: Lombardi Consulting Ltd., Xemxija, SPB 3921, Malta
Francesco Moresino: Haute École de Gestion de Genève, University of Applied Sciences Western Switzerland, CH-1227 Carouge Genève, Switzerland

Service Science, 2012, vol. 4, issue 4, 320-330

Abstract: We propose a new integrated model for pricing airline tickets that takes into account the perceived value of multiple services associated with a given flight. For instance, clients perceive benefits on different attributes such as refund options, baggage allowances, time slots, days of operations, Web check-in services, as well as airline brand. These elements of perceived values are not, to our knowledge, modeled in existing yield management systems. Our integrated model includes a classical aggregate planner for services as well as a share of choice. In this paper, we have worked closely with an airline company and provided it with relevant managerial recommendations.

Keywords: airline pricing; conjoint analysis; mathematical programming; share of choice; perceived value risk (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orserv:v:4:y:2012:i:4:p:320-330

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