3- If an airline prefers to increase its revenue, it has to decrease the fare.
Related to my explanation on Singapore Airlines from previous topic, the facts demonstrate that SQ is one of good sample for this study.
SQ does not need to decrease its air fare to gain the revenue. On the contrary, SQ attempts to remain their stand as they are. As Singapore Airlines has never demoted their image but they used alternative strategy. SQ delivers their high standard service through the a bit higher price which passenger has paid. However, growth of this airline may guarantee that decreasing an airfare in order to get more revenue is wrong.
When we look on the other example from Middle East carrier, we may find failed strategy on airfare. In the old days, one of the most chosen and powerful airline in Middle East was Gulf Air. Nevertheless, Gulf Air seemed to use wrong marketing strategy, GF decreased airfare by wishing to generate more revenue. Unfortunately, the situation went wrong. GF could not control their YIELD management then the company let doing oversold. The result was severe since the airline had to transfer passenger to travel on other carrier by issuing ‘Flight Interruption Manifest” which costs double or triple expensive than passenger’s original ticket.
Having said that Emirates or other new era Arab’s carrier, they may use different strategy. Arab carrier owns and supplies themselves by their own fuel. Therefore, decreasing airfare ticket to gain more attention from passenger does not affect much on their cost.
Personally, airlines do not need to sell cheaper ticket to earn more revenue but they can increase their revenue by using right strategy.