Economic analysis of airline pricing: retrospective analysis and current state

The article provides an in-depth analysis of airline ticket pricing, tracing its historical evolution and exploring current trends. The article provides a detailed description of the structure and components of airline ticket pricing, as well as the impact of factors on this process. The research examines the development of airline pricing from the early 20th century, when aviation was a luxury reserved for the wealthy, to its current state as a competitive and affordable industry. Key historical milestones are discussed, including the introduction of computerised reservation systems in the 1960s, the US Airline Deregulation Act of 1978, and the emergence of low-cost airlines in the 1980s and 1990s. These developments have led to fundamental shifts in the pricing of airline tickets, which made it possible to transform the aviation landscape by reducing fares and expanding access to air travel. At the same time, the article discusses economic and technological factors that influence airfare changes, such as deregulation, fuel costs, global crises and consumer demand. The article analyses dynamic pricing strategies supported by sophisticated modern airline pricing algorithms, which allow carriers to adjust fares in real time in line with market conditions. The study also highlights important events that have influenced pricing trends, such as the 2008 financial crisis and the COVID-19 pandemic, showing how airlines have quickly adapted to economic shocks by adjusting their pricing structures. In addition, the study delves into the speed and frequency of price fluctuations, highlighting airlines' responses to real-time data and global changes. The implications of these price dynamics are assessed, identifying their impact on industry profitability, passenger accessibility and other economic consequences. Airlines benefit from revenue optimisation through dynamic pricing, while passengers face challenges in navigating variable fares. Thus, the results of the study, namely the economic analysis of airline pricing, provide an opportunity to identify the complex interaction of factors that shape airline prices. The results highlight how technological advances, competitive pressures and changes in consumer behaviour continue to redefine the airline market, offering valuable insights into the factors driving the evolution of airline affordability.