Determinants of Price Formation for Air Transport Services
Purpose: The purpose of this paper is to present the impact of the most important price formation determinants on the development of air transport. Design/Methodology/Approach: Research on the factors determining the price strategy of carriers is based on available literature, documents developed by IATA and the Civil Aviation Authority, materials of companies constructing Airbus and Boeing aircraft as well as on own empirical research. Findings: The empirical research carried out indicates the crucial importance of quality and price in creating the unique services and added value. The pursuit of strategic policy consists in defining the company’s directional goals and areas of its operation, as well as determining the principles of efficiency of allocation and use of assets. It is also necessary to develop the market rules for the price-making process in the management system and specify ways of behaving in crisis situations. Practical implications: The key factor determining the competitive advantage of service providers are modern methods of price formation and improving the quality of services. Data can be compared with other countries. Originality/Value: Since the choice of strategy appropriate for a given enterprise depends on its material situation, assets, management and relations with the environment, in which it operates, in particular the position it occupies on the market, the present study gives an insight in the determination of price formation in a unique way able to be adopted by the air transport industry taking into consideration all aspects mentioned above.