Abstract

Purpose – The purpose of the study is to reexamine the pricefairness as practiced by low cost airlines, as a consumer has toexperience such inconveniences as inferior airport transportation,extra fees on in-flight meals, and non-negotiable seats, and con-sumers evaluate such experiences keeping in mind their totalcosts. This evaluation includes price fairness and allows a rea-sonable and overall consideration of factors of low cost airlines. It tries to set up a measurement of the indicators consumers'perceptions of price fairness academically as it adapts price fair-ness to airline services which are renowned for price volatility. Research design, data, and methodology – The research pro-poses an alternative pricing strategy for the long term profit oflow cost airlines after going over conflicts between the traditionaltheory of consumers' price perception mechanism and flexiblefair policy of low cost airlines. It was meaningful when it relatesto the early stage of the business, while it enhances the risksrelating to the long term survival of low cost airlines. In addition,it is significant as it highlights the negative influences on con-sumers’ perceptions of price fairness, as low cost airlines runon extremely low cost perspectives. Results – The results of the research provide insight into fourperspectives, as consumers' perceptions of price fairness are influ-enced by the frequency and range of price changes and services. The first perspective is that it would lead to positive priceevaluation when a low cost airline cuts prices frequently with lit-tle changes than one big change. It also would lead to the same result when it comes to necessary services. The second perspective is that one big increase of pricewould rather undermine the negative aspects of price changesthan those of several smaller ones. The third perspective is that additional services would begood to consumers' perceptions of price fairness as comparedto discount benefits with respect to the cost. Finally, a low cost airline should consider that consumers willchange airlines or defer their flight schedule if the flight fares in-crease beyond their limits. Conclusions – Low cost airlines should reconsider their pric-ing policies for services that were provided free earlier. A con-sumer would not like discount benefits when made to pay forservices that were, for long, free of charge. If a low cost airline can provide services with no charge, itshould improve volumes if the costs are standardized and,moreover, should consider the charging fees. Alternatively, aconsumer can choose between services and fair discount. Low cost airlines are implementing sales promotion strategies,as the competition is more intense than it used to be. In thesedays, they should regard services over sales promotion, as con-sumers may prefer to spend money on good premium services. Some differentiation in services could create a good market po-sition for the airlines and, hence, good financial performance.