Correspondence: Jean Michel Chapuis, University of French Polynesia, P.O. Box 1841, Punaauia 98703, French Polynesia. E-mail: jean-michel.chapuis@upf.pf

¹is an assistant professor of management at the University of French Polynesia. He is the head coordinator of International Hospitality Management Master. Having completed a PhD in corporate finance, he has orientated his research work towards the way companies use revenue management strategy and operations.

²is the director of the Network and Revenue Management at Air Tahiti Nui (TN), the international airline of French Polynesia. He is also in charge of alliance strategy of TN.

Received 28 January 2009; Revised 28 January 2009; Published online 15 May 2009.

Abstract

Fare classes may contain prices in different currencies for an international airline. This paper questions whether booking controls are sensitive to exchange rate movements. The analysis illustrates that a stronger national currency results in the closing of foreign points of sale earlier because of a direct effect on the value of foreign fares and an indirect effect on bid prices. Bid prices, as an average of national and foreign fares, are decreasing when the home currency strengthens against a foreign currency. The experience of Air Tahiti Nui shows that Revenue Managers carefully monitor exchange rate when fluctuations are bigger than the relative spread between the mean fare of consecutive fare classes.