Abhav News Coach

1) Exam Notes (5 bullets) - Dynamic pricing in airlines involves adjusting fares in real-time based on demand, a practice enabled by deregulation in India since 1994. - A PIL has been filed in the Supreme Court challenging dynamic pricing, arguing it disproportionately affects average Indians, especially during emergencies and peak seasons. - Dynamic pricing benefits airlines by maximizing revenue and catering to different customer segments, but it can also lead to price volatility and consumer frustration. - The core economic issue is the transfer of 'consumer surplus' (the difference between what a passenger is willing to pay and what they actually pay) to 'producer surplus' (the airline's profit margin). - Alternatives like capped airfares offer stability but may impact airline revenues and service availability, highlighting the need for a balance between market efficiency and consumer protection. 2) Why it matters for SLS Pune PI (1 bullet) - SLS Pune emphasizes socio-economic justice and legal reasoning; this topic allows candidates to demonstrate understanding of economic principles, regulatory frameworks, and the impact of policy on vulnerable populations, showcasing critical thinking and ethical considerations. 3) PI Questions you may be asked (2-3) Q1: What are the ethical considerations surrounding dynamic pricing in essential services like air travel, especially concerning access for low-income individuals? Ideal Answer: Dynamic pricing raises ethical concerns about fairness and accessibility. Point: It can create barriers for low-income individuals needing emergency travel. Reason: The price fluctuations exploit urgent needs. Example: A sudden family emergency requiring immediate travel could become unaffordable. Perspective: A balance is needed to ensure essential services remain accessible while allowing businesses to operate profitably. Q2: Discuss the potential trade-offs between consumer protection and market efficiency in the context of airline fare regulation. Ideal Answer: Consumer protection through fare caps can ensure affordability, but may reduce airline profitability and service availability. Market efficiency, driven by dynamic pricing, maximizes revenue but can lead to price gouging. A balanced approach is needed, possibly involving targeted subsidies or regulated price bands. Q3: How might technology, such as AI, exacerbate or alleviate the issues associated with dynamic pricing in the airline industry? Ideal Answer: AI could exacerbate issues by enabling more sophisticated price discrimination, but it could also alleviate them by improving demand forecasting and optimizing pricing for both airlines and consumers. Transparency in AI algorithms is crucial to ensure fairness. 4) Optional 1-liner stance - "My balanced view: Dynamic pricing requires careful regulation to prevent exploitation while allowing airlines to operate sustainably, considering the socio-economic impact on diverse populations."