Free Custom «Cons of the Yield Management» Essay Paper

Fully aware that the pricing system of the yield management considers other factors besides demand for airline services such as age, frequent flyer information and socio-economic information of the consumers to compute airline ticket prices, there are high chances that a larger percentage of the airline clients will be penalized due to the functional price discrimination. Consumers coming from wealthy neighborhoods with higher wealth index will be charged higher airline ticket prices even if they are coming from poor households. Likewise, wealthy clients who are living in neighborhoods with lower wealth indices will also be charged lower rates by the airline ticketing system. The two scenarios constitute a serious discrepancy by the pricing system.

Price regulation and standardization for the airline tickets is not possible with the yield management. The cost of the airline tickets keeps on changing from time to time depending on their demand; this phenomenon might impact negatively on the customer satisfaction. As such, first time passengers might lose loyalty for the airline. Similarly, the reputation of the airline might also be at higher risk because of the growing numbers of the dissatisfied customers.

 

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Possible Responses to the Yield Management

If I overheard a person in front of me (while in a place) in line getting a better room rate at a Hilton Hotel than I do, I would definitely lose faith in the hotel and suspect all the subsequent dealings as fraudulent. Even though there are other factors at play when it comes to the process of fixing prices for the airline and hotel charges, I would obviously lose confidence in and swift my loyalty from the service provider, upon realizing that I have been overcharged.

Open protests can also follow, if they fail to address my charge reduction claims within the time. With the notion of exploitation by the hotel in mind, I would find it extremely difficult to appreciate the quality of the services it offers, no matter how wonderful they are. The resultant negative publicity of the hotel would also spill over to my friends, since I will constantly caution them to pay much heed in any deal with the hotel.

How customers manipulate the airline to get better fares

According to Gary (2009), many airline passengers do not give the airlines their exact personal information such as physical address, district and age, particularly if they are living in affluent neighborhoods. Instead, they give those that depict them to have come from relatively poor neighborhoods. These details will help them to get airline tickets at much lower rates, than if they would have used their real personal information.

Cases of impersonation by the non-frequent flyers have also been detected by the airline ticketing agents (Gary, 2009). Some of the airline passengers pretend to be frequent flyers to enjoy the special discounted rates and privilege, the highly esteemed lot is entitled to. Advanced bookings, made by the customers during the low seasons to cover the whole year travels, also form a clever strategy to get better fare rates from the airline ticketing system.