Ethical and Legal Issues in Pricing in the Airline Industry

Ethical and Legal Issues in Pricing in the Airline Industry1

Chapter I

Introduction

There is nothing inherently “ethical” about balancing safety and costs. Few projects can reduce safety risks to zero. The key factor is how does the company balance the risks and how are those decisions made known to key stakeholders, both inside and outside of the company. Intelligent pricing is one of the most important elements of any successful business venture. Yet many entrepreneurs fail to educate themselves adequately about various pricing components and strategies before launching a new business. Smart small business owners will weigh many marketplace factors before setting prices for their goods and services. As the Small Business Administration (SBA) indicated in The Facts About Pricing Your Products and Services, you must understand your market, distribution costs, and competition. The marketplace responds rapidly to technological advances and international competition. You must keep abreast of the factors that affect pricing and be ready to adjust quickly.

Ethical and Legal Issues in Pricing in the Airline Industry2

Chapter II

Review of Literature

Many ethical conflicts develop from conflicts between the differing interests of company owners and their workers, customers, and surrounding community. Managers must balance the ideal against the practical–the need to produce a reasonable profit for the company's shareholders with honesty in business practices, safety in the workplace, and larger environmental and social issues. Ethical issues in business have become more complicated because of the global and diversified nature of many large corporations and because of the complexity of government regulations that define the limits of criminal behavior. For example, multi-national corporations operate in countries where bribery, sexual harassment, racial discrimination, and lack of concern for the environment are neither...