Abstract
Aviation is characterized by stiff competition—amongst all actors and at many different levels. For example, airlines compete with each other for the same passengers and freight. To this end, they often employ a variety of strategies. For example, different airline managers often opt for different pricing strategies. Such variations in strategy translate into differing financial results at the end of the fiscal year. This highlights the need for research on how pricing strategies can be used to support strategic objectives, as well as on the possible consequences of these choices. This contribution specifically addresses relationships between airline pricing, yield, and profit. It is illustrated by a case study set at Brussels Airport, involving one incumbent and two newcomers. The case provides an example of deviant behavior, in which an incumbent makes effective use of pricing as a barrier to entry. The discussion explores the extent to which this type of behavior can be generalized and which alternative strategies might be possible.
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