Impact of Seasonal Demand on Emirates Airline Tickets Purchase And Prices – Literature Review
The airline industry is one of the most dynamic entities that exist in the contemporary world. In recent years, air transport has become the most reliable means of transportation capable of ferrying both passengers and cargo to different localities globally. Through the creation of a business niche, the airline industry has been developing in record speed. The implementation of incentives such as reduced regulation and leeway to create low-cost models has made the airline industry a modern-day success story. Investors and benefactors in this sector have been investing millions of dollars geared towards the improvement of the existing fleets due to a high possibility of raking in numerous profits. The central idea within most of the business models used by many of the leading airlines is to minimize their operational costs while increasing their annual projections (Vasigh, et al.). The sheer elasticity of this cost-driven industry is one of the reasons why seasonality has been witnessed over the years. Fluctuation of airline tickets has now become commonplace with demand for tickets changing by the day. The increase in significant players in this market meant that demand became fluid, mainly affecting the purchase of tickets and their prices. Leading economics and pundits have largely ignored seasonal demand in this market since only a handful of individuals have taken it upon themselves to interrogate this particular issue and conclusively bring it to a close. In particular, airlines in the Middle East have been victims of this phenomenon with Emirates Airlines serving as a prime example.
According to Evans et al. seasonal demand is one of the primary reasons why airline tickets are often changing prices and later influencing the purchasing pattern of potential customers (98). It’s vital to acknowledge that we live in a diverse world with an assortment of cultures. Their practices and occasions that are central to these set of ideals have emerged as important determinants of ticket prices and the period during which they are purchased. Globalization is a reality that we all have to contend with and has mainly been cited as the primary factor behind the permeation of different cultures, dogma, and practices around the world. Leading airlines, such as Emirates, have invested heavily in experts whose task is to come up with a list of these methods and the areas that are significant to them. Tourism therefore becomes a focal point of their strategy, especially in countries which host a vast majority of individuals living in the diaspora. Chances are that persons who staunchly follow a particular creed or ideology will travel to a county or sites that are sacred to their disposition, creating a unique opportunity for commercial airlines to capitalize on this occasion. The result of is that airlines capitalize on this particular state of affairs to boost their income. Demand for tickets is soon on the rise, which sees most of the potential customers making necessary arrangements that will see them acquire air tickets earlier than usual. Their purchasing pattern is therefore influenced directly by the seasons and events that they are keen enough to be part, with these oligopolies becoming the primary beneficiaries of these changes. For example, Emirates is acutely aware that Muslims from all around the world will make a concerted effort to travel to Mecca, Saudi Arabia during the holy month of Ramadhan. As mundane as it seems, this vital piece of information will influence their ticket prices due to an urgent need to attend such an event. The impact of this seasonality is that adherents from far-flung countries with a substantial Muslim population will book their tickets earlier than usual, a clear indication of a change in ticketing pattern.
McCafee opines that major players in the airline industry are fully aware of the financial opportunity that seasonality presents (57). The seasonal demand for tickets often occurs during specific periods during the year with these shrewd business entities taking this opportunity to revise their airline ticket price chart. In occasions when seasonal swings occur, often heralded by a significant reduction in the number of travelers, airlines have been known to implement measures such as offering discounted rates to attract more persons to travel by air. The general idea behind this strategy is to minimize the loss due to the costly nature of air transport. According to Peoples, seasonality introduces a “feast and starve” scenario that might impact an airline adversely if not taken seriously (45-50). The whole point of establishing such behemoth entities is to ensure that the highest amount of profit is made during these transactions. Raising ticket fees becomes the most viable legal means to improve one’s profit margin especially in an industry that is as volatile as this one. In the case of Emirates, experts working in its marketing departments are often on their toes observing the intricacies of the world around them and capitalizing on this state of affairs. High returns, increase the likelihood that an airline will remain operational when the number of persons traveling falls. The profits made during peaks seasons are used as a contingency measure that will ensure the firm’s survival even when their amount is made drops. The onset of winter in North America and Europe presents a perfect opportunity to change the prices as they see fit to ensure that enough money is made before the beginning of summer. The ripple effect of this seasonality is that a vast majority of the holidaymakers will be unable to enjoy their trip as they had earlier thought. Tickets are most expensive to purchase during this period which translates to other additional costs. The cost of accommodation in luxury hotel suits is also highest during this period, with this variation
Suppositions made by Vasig et al., suggests that impacts of seasons extend to the global price of oil, therefore impacting the economies of various countries negatively. Over the years, corporations in charge of fossil fuel and airlines have developed a symbiotic relationship. Airplanes are leading consumers of the fuel they produce, which is quite integral during air travel. Planes require massive amounts of jet fuel for them to remain in business, with these companies gladly providing them with this product. Nonetheless, fossil fuel companies are also in their industry to make a profit and therefore raise the price. The seasonal demand thus includes a rise in global oil prices which affects the third world and developing countries adversely. An increase in the oil prices translates to higher costs of living, especially when the incomes of those in question remain static.
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