Originally Posted by
vail
I fly the ege route a lot--and if the skiing is good there are many that would like to fly at the last minute--especially after a snow storm--and will not pay the last minute ridiculous fare--so the aircraft will fly out with empty seats for no reason.
The same can be said of many other routes--last minute trips to the Caribbean, Hawaii or Las Vegas.
The pricing structure of trying to gouge the last minute traveler has obviously not worked--or they would not be losing money year--they obviously need to come up with a new pricing structure--and do not assume just because they do it--it works.
Originally Posted by
ijgordon
It works fine when the (business) economy in good.
It fails miserably when the economy is bad.
My gut tells me the airlines are not adaptable enough, which is part of the reason why their profitability swings so much through the cycle, and I think for the most part, ends in the red on balance.
I think this is the point of the e-savers and other weekend fare equivalents... same with Priceline availability. It's a way to push seats to people who are price sensitive and not lose potential revenue to people who are less price sensitive... oh... and so is releasing FF seats.
There are only 2 ways to lower the price of the highest priced ticket: increase the lower fares, or increase volume on fares that provide a significant enough profit. I suspect that the airlines have tried both without enough success. It's back to the over-supply and inability to achieve pricing power thing again. As well as the high labor cost/high fuel cost thing again.