An Empirical Analysis of Delhi - Mumbai Sector Flight Fares

Abstract

Revenue management is the art and science of making the right product or service available to the right customer at the right time through the right channel at right price. Dynamic pricing plays a crucial role in the implementation of revenue management in passenger airline reservation system. The liberalization of domestic aviation sector in countries such as India has seen many new market entrants resulting in higher competition while setting the flight fares. The variation in flight fares of Delhi – Mumbai passenger airline sector is studied for a departure date based on the number of days in advance the booking is made. Descriptive and inferential statistical analyses of the fares reveal the impact of airlines, booking channels and departure time windows on the pricing decisions of flight fares. The analysis framework of this study could be used as a basis for a continuous tracking study of flight fares by airline revenue managers to help them arrive at the right fare for each fare class of a flight.