Anti-trust laws and pricing. Global Airlines is a major low-price airline carrie
ID: 2576868 • Letter: A
Question
Anti-trust laws and pricing. Global Airlines is a major low-price airline carrier for both domestic and international travel. The company guarantees the “lowest price” ticket for travel within the United States. The “lowest price” ticket guarantees do not apply for travel on Monday mornings and Friday evenings, which are busy travel times for businesses travelers.
Do these pricing practices of Global Airlines violate any anti-trust laws? Why or why not?
Why is Global Airlines not offering a price guarantees for flights on Monday mornings and Friday evenings? Do you agree with this policy? Explain briefly.
What other factors should Global Airlines consider before implementing these pricing policies?
Explanation / Answer
For domestic routes, the lowest fares are usually found 50 to 100 days before departure, with the absolute lowest fares found about 57 days prior, according to a study by Expedia and the Airlines Reporting Corporation (ARC).
Those who are flying an international route should plan even farther in advance – between 150 and 225 days – with the best deals around the 171-day mark, the study found.
A similar study by CheapAir found that the best time to book a domestic flight falls between 29 and 104 days in advance.
Still, airlines have been known to offer deals on airfare just a couple weeks before departure to fill a plane.
Research from ARC suggests that the lowest fares are found on Sundays and Tuesdays, regardless of the domestic or international destination.
It analysed purchases from travel agents and found airlines offered the biggest bargains on Sundays, with Tuesday being the best day to book during the traditional Monday through Friday work week.
It’s not a guarantee for every flight, however.
Smart travellers will check prices every day of the week, as prices tend to fluctuate.
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