Research Of Shandong Airlines’ Strategic Pricing In Revenue Management

Shandong Airlines was established in1994in Jinan city, Shandong province. After nearly20years of development, the airline network of Shandong Airlines now is based in Jinan, Qingdao, Xiamen, Yantai, connecting other major cities.The capacity of operating the company has made a big contribution to the improvement of Shandong airlines’profitability. With the development of Shandong airlines, to improve the capacity of operating the company has becoming more and more necessarily.I’m working in the revenue managementdepartment of Shandong airlines. Revenue management is a technology of optimizing revenue of airlines which now has been widely used in most airlines. Civil air transport has its own unique characteristics, including varied and unstable market demand, fixed transportcapacity, high fixed costs and perishable production. Revenue management can be expressed as selling productions to right people at right price during the right time. The characteristic of Civil Air Transport determines that revenue management will be the most effective technology of optimizing revenue of airlines.With the price control of domestic civil air transport being relaxed, technology of revenue management has made a big development. Most of the airlines founded their own revenue management department. This paper discussed the pricing strategy of Shandong airlines based on the analysis of Shandong airlines’operating environment.This paper analyzes the internal and external environment of Shandong airlines, including the economic development, national policy, major competitors and the development of Shandong airlines’own revenue management department. Based on those analyses, this paper discusses the principle and process of pricing. Using the theory of dynamic pricing and game theory and consumer behavior, this paper discusses how to operate selling a single flight in order to optimize the whole company’s revenue.