A while ago, one of our 'airline' customers very kindly paid for some of our staff to sit with a very expensive outside consultancy company to chew over the issues of 'compliance' and 'competition' .....
One of their questions was "How would you go about deciding your selling rates for a new entrant carrier into a particular market ?"
We replied that we would first evaluate the existing competitor's services based on their cost, service levels, routings and frequency etc, then we would look at what we're selling and compare them, eventually deciding where we (if we were customers) would view/position ourselves ...
Sound reasonable ?
Oh but no good sirs .... we were told, in rather a dismisive way that we could not posible use our competitor's prices as a yardstick and that if we did that we would be in contravention of the regulations !
So how are you supposed to decide your prices without comparing what the others are selling at ?
That's like opening a garage and selling cars for £50k a pop when the place across the street is knocking out exactly the same cars for £10k ! - You ain't gonna sell many !!
Oy vey !!
