Eureka Case · The Easter Surge
Setup · 1 of 5

The Easter Surge

You are the revenue manager at IslaAir, a regional Spanish carrier flying Madrid, Barcelona, and Bilbao to Mallorca. Easter is three weeks away.

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The situation

Bookings data shows Easter demand on your three Mallorca routes runs 35–45% above a typical April week. Last year you held prices flat. Load factors hit 98%, and Twitter complained you left money on the table.

This year, the CFO is asking the obvious question: "How much would a surge actually make us — and at what cost?"

Your job in this case: read the demand pattern, run the numbers on a price increase, and commit to one of three pricing strategies. There is no "right" answer — but there is one you can defend.
Explore the data · 2 of 5

Last year's Easter demand

Daily bookings, indexed to the route's April baseline (100 = normal April weekday). Toggle between routes to see the pattern.

Demand index · Easter week peaks Thursday–Sunday. Hover a bar for value.
What to notice: demand isn't flat across the week. The premium opportunity is Thursday–Sunday. Monday–Wednesday is closer to normal and price-sensitive.
Run the numbers · 3 of 5

How much does the surge actually make?

Model assumptions, baseline Madrid → Mallorca Thursday flight: 180 seats, current price €120, expected demand at €120 is 180 seats (sells out). Fixed cost per flight: €38,000. Demand elasticity: each €10 rise above €120 drops expected demand by ~5%.

Your price €120
Slide to test prices from €120 (current) to €240.
100%
Load factor
€21,600
Revenue / flight
−€16,400
Profit / flight
At €120, demand exactly matches capacity. Profit is negative because fixed cost is €38k.
Watch what happens: revenue per flight peaks somewhere between €170 and €200 on this curve, then drops. Find the peak — that's where the math says to land.
Make the call · 4 of 5

Pick a pricing strategy for Easter

Three strategies are on the table. Each one is internally consistent — but they make different bets about customers, competitors, and risk.

Outcome · Hold prices flat at €120

Financial: Sold out across all 12 peak flights. Revenue €259k, profit −€197k vs. fixed costs (typical Easter loss recovered later in the year through summer routes). Same as last year.

  • Customer experience: No complaints. NPS unchanged.
  • Competitor reaction: Vueling and Iberia both surged ~40% on the same routes. You look like the cheap option.
  • CFO meeting: "We left an estimated €110k on the table again. Why?"

Outcome · Moderate surge to €180 (Thu–Sun)

Financial: Peak flights ran 91% load factor at €180. Revenue €324k, profit −€132k. Net gain vs. holding: +€65k across 12 peak flights.

  • Customer experience: A handful of complaints on Twitter; loyalty-program members got an apologetic discount voucher and quieted down.
  • Competitor reaction: You're priced in line with Vueling. No competitive pressure.
  • CFO meeting: "Good. Do this for summer too — but model the price ceiling more carefully."

Outcome · Aggressive surge to €220 (Thu–Sun)

Financial: Peak flights ran 76% load factor at €220 — empty seats showed up. Revenue €301k, profit −€155k. Net gain vs. holding: +€42k. Less than the moderate surge.

  • Customer experience: Five news stories about "Easter price gouging." Loyalty members furious. Some bookings cancelled and rebooked on competitors.
  • Competitor reaction: Vueling held at €180 and ran a campaign called "Sin sorpresas en Semana Santa" aimed squarely at you.
  • CFO meeting: "The number looks fine on paper. But brand damage takes a year to undo. Don't repeat this."
Reflect · 5 of 5

One sentence for the CFO

Your CFO asks why you priced where you did. Write the one-sentence justification you would actually give.

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The point of the case: the moderate surge isn't obviously right from the chart alone. It is right because it captures most of the upside while leaving enough goodwill on the table to keep the customer base — and the competitive narrative — intact. The aggressive surge wins on a spreadsheet and loses on the brand.

Your case at a glance

Case The Easter Surge · Airline revenue management
Your pricing choice —
Price tested in the model €120
Key learning Pricing is an exercise in brand defence, not just spreadsheet optimisation.

If you want to go further

Article
The Price Is Right: A Practical Guide to Pricing Decisions — McKinsey Quarterly (2003)

The classic intro to managerial pricing logic. The airline case is a worked example of its argument that price is a strategic lever, not a residual.

Book
Revenue Management: Hard-Core Tactics for Market Domination, ch. 3 "Yield Management" — Robert Cross (1997)

The canonical book on yield management. Chapter 3 is the airline-specific deep dive that puts the slider you just moved into its operational context.

Practitioner
Why Surge Pricing Is Bad for Uber — Kellogg Insight, interview with Robert Phillips (2017)

A practitioner counterpoint on why aggressive surge can be brand-destructive even when the math says it works — exactly the case's teaching point in a different industry.

Case
Marriott Rooms Forecasting — HBS 9-693-019

A neighbouring case that develops the same yield-management muscle in a hotel context, with cleaner forecasting mechanics for students who want the quantitative side sharpened.