Perceived fairness of airlines' revenue management from young adults perspective

Abstract: Perceived fairness of airlines’ revenue management practices from young adults perspective The objective of this research paper is to familiarize the reader with airline revenue management (RM) practices and assess the perceived fairness. A mixed method approach was implemented, as both qualitative and quantitative methods were employed. Initially, focus groups were executed in order to develop instruments for the survey. Subsequently, the questionnaire was used to test the qualitative results on a bigger scale. Airline RM was identified to be significantly different from the one implemented in the hotel and cruise ship industries due to capacity constraints, differences in pricing and implementation of specific versus establishment-wide RM. Furthermore, airline revenue management is generally perceived as a fair business practice that most of the participants are familiar with. Despite that, matters such as short termed fare alterations, excessive prices of ancillaries or lack of choice were indicated as unfair issues. Additionally, social comparison appeared to cause negative effects too. The paper contributes to the existing literature by revealing specific issues of revenue management that are negatively perceived. From a managerial point of view, the study points out the areas which require rewording and reformulation in order to increase perceived fairness.