Yield Management in the Airline Industry

Airline passengers today stand in numerous lines, are crowded into small seats on mostly full airplanes, and often spend time on taxiways because of air-traffic problems or lack of open gates. But what gripes travelers almost as much as these annoyances is finding out that the person sitting next to them paid a much lower fare than they did for their seat. This concept of revenue management results in ticket pricing that can range from free to thousands of dollars on the same plane. For example, on a recent 11.35 am flight from Minneapolis to Anaheim, California, on an Airbus A320, the following are what passengers paid for various seats: first class, 1 seat, fare $ 817; full fare, 4 seats, fare $ 792; corporate discount, 5 seats, fare $ 491; 21-dy advance, 20 seats, fare $ 273; deep discounts, 33 days, fare $ 190; frequent flyer program, 7 seats, fare $ 0; connections, 53 seats, fare -; empty, 27 seats, fare-.

Make the case for, and then against, this pricing system.