Reference no: EM132942844
Alberta Pacific Airlines Case Study
THE PROBLEM
Transportation economics students at BCIT conducted a study of traffic patterns at Vancouver International Airport's domestic air terminal. Teams of students interviewed passengers as they were checking in at the luggage/ticket counter. Their questions sought destinations, reasons for travel, and fare.
Mark Craig and Sandy Forman conducted the first interviews on Monday morning. The following are excerpts of the initial interviews.
The Coleson's:
"We retired two years ago and decided to stay in this town. We are on our way to visit our daughter and her family in Calgary. We made plans for this trip several months ago. Let's go see here, our fares are $180 each. We're staying until a week from Thursday, and we're coming back on the late-night flight. But we know that we can't change the flights nor can we refund these tickets."
Jim Smith:
"I'm a student here at UBC. I'm going on an interview trip to Calgary. I'll be home tomorrow night. The company called me on Friday to schedule my interview. My fare? -- $650. It's really pushing my VISA bill, but the company contact said I would be reimbursed later today."
Jack Barry:
"I work for ABC Industries here in town. I'm going to Calgary for a sales meeting. This trip was planned about two weeks ago. My fare was arranged through some deal we have with a local travel agent. Let's see, the fare is $475."
Mark and Sandy looked at their interview findings to try to make some sense out of them. Here were the first four people who were taking the same plane to the same destination, yet the fares varied by as much as 72% -- from $650 down to $180.
CASE QUESTIONS
1. Does this make sense and is it fair?
2. Why would the airline price its services in this manner? (Discuss each of the persons surveyed.)