Caso American Airlines

Universidad de Chile
Facultad de Economía y Negocios
Semestre primavera

Caso Grupal Pricing: “American Airlines”

Santiago, 22 de octubre de 2009

Curso

Pricing

Integrantes

Introducción

American Airlines, Inc. es una de las aerolíneas más conocidas y más desarrolladas de los Estados Unidos. Es también la línea aérea más grande del mundo en cuanto a kilómetrosrecorridos y a tamaño raudo de pasajeros, además es la segunda línea aérea más grande en términos de aviones manejados. Su total de ingresos de operaciones hace de esa compañía aérea la más grande en el mundo.

El caso presenta la situación de American Airlines en 1988. Gracias a la desregulación en el sector de las aerolíneas en 1978, las compañías pueden ahora determinar de manera libre elprecio del pasaje para los clientes.

Gracias al Revenue Management, American Airlines puede optimizar sus ingresos. La meta del caso es analizar las decisiones estratégicas que debe tomar la empresa y estudiar diferentes situaciones que necesitan una táctica específica en frente de la competencia.

1.- Identificar las decisiones estratégicas y tácticas que debe tomar American Airlines. ¿Quéherramientas puede utilizar la empresa para apoyar sus decisiones?

American Airlines has to take several strategical decisions:

← Determine new routes structure. Thanks to free entry in domestic U.S. routes, routes structure are now an important element of the competitive strategy. To take decisions, the company could use the “hub-and-spoke system”, that is to say an intrigateweb of major regional hub bases propagating route spokes into local markets.

← Improve several marketing components : ticket distribution, frequent flyer programs and customer service (punctuality, the “flying” experience, …)

← Determine fare structure: it is an obligation in order to maximize passengers revenues by selling the right seats to the right customers at theright prices. There are 2 components :
o Pricing: the company has to determine fare structure, that is to say fare classes and level, but also restrictions, that is to say advanced purchase conditions, cancellation penalties, Saturday night stay requirements, …
Since the customers are heterogeneous, they have different price sensitivity. American Airlinehas to determine prices taking into account these differences. To determine the price, 5 steps have to be respected:
1. Value Creation: the very foundation of pricing strategy which implies understanding the economic value that customers receive and segmenting markets based on value;
2. Price Structure: the menu of prices that enable customers to trade off price paid for valuereceived. The firm has to use tools such as price metrics, and segmentation fences.
3. Value Communication: American Airline has to educate customers about the value they actually receive bringing perceptions of value into line with actual value.
4. Pricing Policy: rules, policies, and procedures customers follow for different pricing configurations.
5. Price Level:it is determined by all previous steps.

For price insensitive customers, the company doesn’t have to give fare discounts. The price structure has to present a menu of “fixed prices” (non-negotiable) in exchange for a variety of offers (“flexible offers”). Restrictions must be designed, such as advance purchase and minimum stay requirements, cancellation penalties.

o YieldManagement: after determining prices and fences, the company has to control the number of seats available in each fare segment.
Yield management simultaneously integrates differences both in the cost and in price sensitivity. The company creates a regression model of demand for the service, and predicts demand over time leading up to the time of delivery. It then tracks sales; when sales fall...