Business talk: Prices and costs in the airline industry

What about costs? Can firms ignore the production costs when pricing their products?

Let’s have a look at the airline industry to get a feel of what is going on.

In particular, can you identify why the airline pricing strategy could be to set prices that are unrelated to costs?

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In response to the question above, share your interpretation of Bill Swan’s explanations.


William “Bill” Swan is Chief Economist for Seabury-Airline Planning Group.

Previously and for many years, he was Chief Economist for Boeing Commercial Airplanes. He has worked for United and American Airlines in operations research and strategic planning. He holds a PhD in Transport Systems from MIT. He has been a researcher, an economist and an expert in air transport for many years. He has been one of the early revenue management developers and has followed the evolution of revenue management in air transport since the 70s.


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This video is from the free online course:

An Introduction to Pricing Strategy and Revenue Management

École Nationale de l'Aviation Civile

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