"No frills" budget airlines compete on price, and sometimes even go out of their way to emphasise the low levels of service they provide, as a trade off for low prices. Visit the websites of a budget airline, such as Ryanair (www.ryanair.com) and a traditional full service airline, such as British Airways (www.ba.com). Use both websites to try to find the price of a flight between two cities, say London and Paris, on similar dates. Experiment with dates, so try a return trip going next week, then another return tip in two months time. Vary your itinerary, so that you go for a weekend break, then for a two day midweek visit.

Questions:

1. From the prices that you have observed, what can you tell about both airlines' policies on price discrimination?

2. To what extent do the airlines use pricing tactics that help to hide the true cost of buying a flight? For example, why does Ryanair quote many of its fares as £xx.99, whereas British Airways quotes its fares in whole pounds?

3. What are the problems and opportunities for the airlines of charging different ticket prices to people who may be sitting next to each other on the same flight?