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September 29, 2022

Who Controls the Airline the Prices…


The airline industry has undergone substantial changes since its early days, especially after the deregulation in the United States and many other countries in the 1970s. One of the drastic changes that came about after the deregulation was the pricing mechanism of airline tickets.


Before the deregulation of airlines, many aspects of airline operations were regulated, including the routes an airline serves, the price of tickets, the number of airlines that served a certain route, and many more. During that time, regulatory bodies, such as the Civil Aeronautics Board in the case of the United States, mandated that even the routes that were not particularly lucrative or with significant demand were to be served and specific airlines were selected to do so. In addition, the regulatory bodies also determined the level of amenities that are available on board. While these regulatory “interferences” may appear to make financially problematic situations for airlines by today’s standards, the regulatory bodies generally maintained ticket prices at higher levels. Therefore, even if the airlines had to operate with higher expenses, their revenues were also high due to high ticket prices.


With airline deregulation, all that changed with more players entering the market and the competition becoming severe—the prices of tickets were determined by airlines based almost purely on one aspect: profitability. After the deregulation, airlines were free to decide which routes to serve and pricing, as well as the service quality, were under each airline’s discretion. As the competition increased and people’s expectations about flying changed, the ticket prices decreased substantially compared to the regulated era—and so did the service quality in many cases. As more people became open to the idea of paying less for air travel while enjoying fewer in-flight amenities, many airlines (legacy, low-cost, and budget airlines) now offer cheap ticket prices with no- or reduced-frills flight experiences. For those who wish to fly with access to more in-flight amenities, different booking classes exist at higher prices.


While the traditional full-fare booking classes were limited to first class (F), business class (J), and economy class (Y), the contemporary classes include additional discount booking classes which may differ from one airline to another. As the volume of air travelers and the complexity of determinants of ticket prices have increased, airlines employ intricate algorithms to offer competitive prices to their customers. The prices are set based on extensive analysis of data, not just on sales and market dynamics, but also on customer profiles, interests, and behaviors. Using such data fed into algorithms, airlines can offer competitive ticket prices that maximize their revenue and profitability.



In such a complex market, where there are vastly diverse price options offered by numerous players, air travelers rely on many channels to purchase tickets that suit them the best. Today, many travelers rely on online travel agents and aggregator sites to purchase tickets at the lowest prices while some use the official websites of airlines. In either case, one cannot be certain of the quality of the flight experience associated with the ticket purchased. However, INT Terminal Travel Group (INTTTG) which has been in existence since 2012 has provided a solution to this problem. When a traveler books a flight through INTTTG, all travel-related needs of the traveler are taken care of, from the time of booking till the customer reaches the destination. Due to the extensive experience of members of INTTTG and close partnerships with airlines and other travel service providers, INTTTG is able to detect any changes to its clients’ flights in real time. In the event of a change to a flight, INTTTG can keep the client informed about it in advance and provide an alternative solution, without any hassle for the client. In addition, through its expertise in the airline industry, INTTTG can offer flights to its clients at attractive rates while ensuring superior flight experiences.


In recent times, the already complex airline pricing structures and overall operations have been made more complicated by the effects of COVID-19. The shortages of personnel and other developments that are making airline operations costlier and somewhat uncertain can lead to higher ticket prices. In such circumstances, flying with an entity like INT Terminal Travel Group that will ensure hassle-free flight experiences at the best prices is becoming more beneficial to air travelers.



GB Hewawasam PhD, MBA, CTIE is an expert in the airline industry with over 20 years of experience and he has demonstrated his global leadership capabilities by simultaneously leading multiple companies located in opposite parts of the world. GB possesses extensive knowledge of air tariffs, flight operations, and customer care, and he is experienced in working with Star Alliance, SkyTeam, and Oneworld. He has utilized his experience and expertise to develop the unparalleled services of INT Terminal Travel Group and serve various airlines as an advisor. His innovative approaches have enabled INT Terminal Travel Group to ensure customer satisfaction and successfully navigate through the challenging times of the airline industry.

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