Aviation Pricing Report: Peak Pricing Analysis of Regional Jets

This report delves into the application of peak pricing within the aviation industry, specifically focusing on a regional jet flight from Columbia, SC (CAE) to Atlanta (ATL). The analysis highlights how peak pricing is implemented, considering the higher costs associated with regional jets compared to mainline jets. The report examines the factors that justify peak pricing, such as the convenience and demand for these flights, especially when connecting to major cities through mainline jets. Furthermore, it discusses the role of cross-subsidization and other pricing models in the context of regional jet services. The report also touches upon the operational aspects, including safety standards and the role of regional jets within the broader US aviation network, referencing relevant literature to support its claims.

Running head: Aviation Advanced Economies
AVIATION ADVANCED ECONOMIES

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Aviation Advanced Economies
Table of contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
The main causes of peak pricing.....................................................................................................2
Conclusion.......................................................................................................................................2
Reference list...................................................................................................................................3

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Aviation Advanced Economies
Introduction
The aviation industry of the USA has been flourishing for the last few years after they are
successful in reducing mainline costs. Regional jet (RJ) from Columbia to Atlanta has been
chosen for the project since it is more advantageous over other flights. It deserves peak pricing
due to various reasons that has been illustrated in this project. However, the pricing strategy of
regional jets from Columbia to Atlanta connecting all the network cities such as New York,
Ithaca and Lowa, represents as peak priced along with cross-subsidization. Regional jets gained
popularity and demand due to its instant availability and lesser capital costs.
Discussion
The regional jets of USA offer short and scheduled aviation service communicating with major
cities. The costs of the regional jets are peak priced because the regional jets operate under major
carrier that markets the jet under a designator code. It has been observed that the fraction of
passengers travelling in regional jets is almost one-fifth of mainline flyers (Nikolicet al. 2019).
The routes covered by regional jets are below 1500 miles that are low density but efficiently
travelled by these jets every day. The regional jets play a significant role in the US aviation
industry by scheduling transportation in most of the North American airports (Tan, 2018).
The main causes of peak pricing
 Greater comfort in travelling in lesser fuel consumption
 Flying efficiency is higher than turboprops
 Safer to travel since the crew members are much expertise in handling situations
 Regional jets exceed the standards of FAA comparative to other airlines
Conclusion
The aviation and transportation department of USA ensures that it renews the license of regional
jets and monitors the safety measures at frequent intervals. The regional jets can carry a
minimum of 100 passengers at a time which is sometimes accommodated into major carriers
from remote airports. Revenue sharing and fixed fee contracts between mainline and regional

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Aviation Advanced Economies
aircraft where regional serve routes coordinating with major also affect high pricing of these
aircraft.
Reference list
Nikolic, J., Zhong, S., Pei, L., Bian, X., Heilman, W. E., &Charney, J. J. (2019). The sensitivity
of Low-Level Jets to Land-Use and Land-Cover Change over the Continental US. The
atmosphere, 10(4), 174.
Tan, K. M. (2018). Outsourcing and price competition: An empirical analysis of the partnerships
between legacy carriers and regional airlines. Review of Industrial Organization, 53(2),
275-294.