Holiday makers only want to fly into ontario
Course:- Business Economics
Length: 666 words
Reference No.:- EM13149091

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An airline is interested in the relationship between two routes - the New York-to-Los Angeles(LAX) segment and the New York-to-Ontario route. Assume that business travellers want to go to Los Angeles,  but can fly into Ontario if they have to. On the other hand, holiday makers only want to fly into Ontario (they value a flight to Los Angeles at $0) and have a lower value of a flight than business travellers. What pricing strategy options are available to the airline? In addition, what relationship between the two markets limits the airlines ability to raise price. Suggest any strategies that can help overcome this relationship?

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