I was booking my flights for the upcomming vacation, and of course I couldn't get a direct flight to where I wanted to go. It is cheaper to go on more flights. In fact, the more flights you are willing to take to the same destination, the less you have to pay. Souldn't flying more cost more?
I also noticed that a flight to Moscow is not much more expensive than a flight to North Carolina. So you might as well go on a really cool vacation to Europe instead of visiting your family for Christmas since you can fly a lot farther for hardly anymore cash.
I also noticed that airfares are still around what they used to be about 10 years ag0. If you haven't looked lately check it out.
4 comments:
I know that when I am flying home for vacation I want as few stops as possible. This is the same for everyone. Direct flights are more convenient. That is why direct flights are usually more expensive. It will take you longer to get across the U.S. if you have 4 stops which in turn makes it less desirable. Because of this, Delta can charge more for direct flights.
Some direct flights, on the other hand are cheaper. I know flying from Boise to Salt Lake, for example, is only $60. This is because there is tons of business being done between the two cities and in turn, more people will fly instead of drive the 5 hours. It is like an incentive. If you can get a cheap flight, why drive?
Airlines really have their hands tied when it comes to raising fares. For one, most are crippled with debt and terrorist worries not to mention enormous amounts of government regulatory standards. All of these things mean that they simply just want to fill seats and the best way to do so is to make airlines fares affordable for all people. How many times do you go to the airport and only see affluent people flying? Never. In-fact I sometimes have to check and see if I'm actually in an airport or a Greyhound bus station.
This is third degree price discrimination (Chapter 11). Divide your consumers into two groups - those that don't mind layovers, and those that don't. Charge them different prices to maximize profits.
I can't say why flights to Moscow are so cheap. My guess is that it is weak demand, or else the Russians are subsidizing to keep the price low.
It''s quite impressive.
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