Pricing strategies and revenue management in air freight transport in comparison with liner shipping

The single pricing approach fails to reflect different demand changes in response to its cargo space prices at different sales periods, though it is widely used in the current spot market by air freight transport companies. As such, this might be an obstacle to maximize the cargo space revenue of air freight companies. This paper conducts the empirical analysis on pricing strategies in the spot market for two competitive air freight transport companies operating on the same segment. It concludes that two companies raise more revenues with the optimized differential pricing approach than with the single pricing approach. The revenue management between air freight transport industry and liner shipping industry are compared and analysed. It recommends that the pricing optimization model can be applied to the liner shipping. In theory, the research enriches the current literature in terms of pricing strategy optimization in air freight transport industry. In practice, it provides references for both air freight transport companies and liner companies in their decision-making of applying the differential pricing strategy