Operating in the southwestern states, Lancer Airlines hopes to avoid entering the price war that currently is taking place between several airlines on the east coast. The best strategy to avoid severe price competition is to:
A) provide frequent travelers the added value of special fringe benefits.
B) cut costs and services in order to maintain profit margins.
C) reduce flights and in-flight services, and lay off employees.
D) determine the break-even price and charge slightly more than that.

Question

Quizplus · Accepted Answer

By providing frequent travelers with special fringe benefits, Lancer Airlines can differentiate themselves from their competitors without engaging in a price war. This can include things like exclusive lounges, priority boarding, and other perks that will make their loyal customers feel valued and encourage them to continue choosing Lancer Airlines. Cutting costs and services, reducing flights and employees, or charging more than the break-even price may save the company money in the short term but could ultimately drive away customers and hurt the business in the long run.

Operating in the Southwestern States, Lancer Airlines Hopes to Avoid