Commercial aviation management functions Essay Example | Topics and Well Written Essays - 1500 words

Commercial aviation management functions - search ExampleThis approach to price management came about as a response to the liberalization of style transport that led to high competition among service providers. Aviation companies realized that they could increase their grosss by interchange the same seats in an airplane to customers based on what they were willing to pay, as opposed to development unit appeal as the only factor in pricing (Shy, 2008, p.23). reward management started as an analysis of variable demand but it grew to an advanced stage of complexity where it now seeks to determine how customers reply to pricing (Hayes & Miller, 2010).Yield management brings about a number of related benefits to commercial aviation. First, it increases revenue without change magnitude the cost of providing services (Quain & LeBruto, 2010). The revenue comes from selling units produced but not consumed under the unit based pricing model. The second advantage of endure management i s that it brings about increases in profits, and not just gross sales (OFallon & Rutherford, 2010). In fact, the overall increase in gross sales in usually marginal compared to the dower increase in profits. Without it, the seats sold under yield management would bring in adjust revenue. The third advantage of using yield management is that it makes it possible for commercial aviation to maximize revenue from available capacity (Rouse et al., 2010, p.57). Commercial airlines sell seats that they would have flown unoccupied at low cost hence they get extra revenue. Finally, it assures revenue despite cancellations when one of the conditions for low fare tickets includes a non-refund insurance policy (Button, 2010). Under most unit-based costing systems, refund policies lead to loss of revenue if buyers request for a refund.Yield management in commercial aviation has two objectives. These are, to get the best average fare (yield) possible, and secondly, to fill