There can be three pricing models that can be applied to pricing for airline services.
The peak pricing model : A high price is charged at the peak time when the demand for the good or service is high and a moderate and low price is charged in the off peak hours .
Price Discrimination: Different prices are charged for different group of consumers .
Cross subsidization: One group of consumers pay a price higher than the cost of service another group pays a price lower than the cost of service. The first group is the subsidizing group and the other group is the subsidized group.
We choose one flight and discuss which pricing principle will be applicable for that flight.
The Monday Morning Flight from Chicago to New York: This is a case where the peak pricing principle can be applied. ...