Nadia Aslam is a wealthy entrepreneur. Two years ago, she bought a struggling airline and changed the name to Skyline plc. The airline offers low-price flights from the UK to popular European destinations. There are high levels of competition in this market.
The low-price flight market is very competitive and passenger numbers have fallen recently. Skyline plc’s marketing department has been working to develop a solution.
Option one – use a loss leader pricing method for off-peak midweek flights.
Skyline plc has fewer customers travelling to city destinations midweek. Most people work Monday to Friday and prefer to book a short break over a weekend. Skyline plc would aim to cover costs and make a profit by charging customers more for luggage and extras such as seat upgrades and meals and drinks during the flight. Skyline plc has found that once customers have flown with them they return again and again.
Option two – keep prices the same and improve sustainability.
Consumers are increasingly aware of the environmental impact of air travel and the marketing department thinks that this will attract a new market. No other low-price airlines are promoting themselves as sustainable. A more sustainable approach would include removing all single-use plastic from Skyline plc flights and only serving drinks to customers who bring reusable cups and bottles on board. Skyline plc would also donate 1% of the profit from each flight to environmental projects to make up for the pollution the airline produces.