On Sat, Feb 06, 2010 at 12:59:43PM -0700, Tom C wrote:
> I've long thought that if airlines simply sold seats based upon what
> it REALLY cost them to fly, instead of giving $100 flights
> cross-country and charging somestimes an additional $300/$400 to fly
> the last 150 mile leg of a trip, they'd be better off.

Actually, to a large extent, they are.

That $300/$400 is close to the true cost of providing service to the
feeder airport - often on a "regional jet" or some other configuration
with few high-priced (business/first-class) seats.  All the overhead 
has to be covered by a small number of daily flights.

The $100 cross-country seat is an attempt to fill excess capacity on
a route which already has far more daily customers paying the regular
price (not to mention the airline target demographic - the business
and first class customers), flying between airports which amortise
the overhead over a larger route network.
The regular price for that seat could well be $400, but it's cheaper
to sell 10% of the seats at $100 than it is to fly with empty seats.


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